How laypeople and experts misperceive the effect of economic growth
AbstractA series of four experiments were performed to examine the accuracy of estimations of economic growth by both experts and lay people, the factors that influence the accuracy of their estimations, and which procedures they use to make estimations. The results show that for actual growth rates higher than 1%, both groups clearly underestimated growth, and the underestimation was lower for experts than for laypeople. The estimations became slightly better when the task was presented in a financial investment scenario. Incentives had no effect on the accuracy of the estimations; however, a positive influence of the need for cognition was observed. Male participants provided more accurate estimations than female participants. The common use of different, and inappropriate solution procedures, accounted for the under-estimators.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Psychology.
Volume (Year): 30 (2009)
Issue (Month): 3 (June)
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Web page: http://www.elsevier.com/locate/joep
Cognitive bias Incentives Need for cognition Forecasting Expectations;
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