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Overconfidence bias and conjunction fallacy in predicting outcomes of football matches

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  • Erceg, Nikola
  • Galić, Zvonimir

Abstract

The aim of this study was to explore the occurrence of the overconfidence bias and the conjunction fallacy in betting behavior among frequent and sporadic bettors and to test whether it was influenced by the task format (probability vs. frequencies). Frequent bettors (N=67) and sporadic bettors (N=63) estimated whether the bets on football games presented to them via an on-line questionnaire would be successful. The bets consisted of singles (one match outcomes) and conjunctions (two matches outcomes), and were presented either in probability or frequency terms. Both frequent and sporadic bettors showed similar levels of the overconfidence bias. However, the frequent bettors made the conjunction fallacy more often than the sporadic bettors. The presentation of the task in the frequency terms significantly reduced the overconfidence bias in comparison to the evaluations in probability terms, but left the conjunction fallacy unaffected.

Suggested Citation

  • Erceg, Nikola & Galić, Zvonimir, 2014. "Overconfidence bias and conjunction fallacy in predicting outcomes of football matches," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 52-62.
    • Handle: RePEc:eee:joepsy:v:42:y:2014:i:c:p:52-62
    DOI: 10.1016/j.joep.2013.12.003
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    1. Charles S. Taber & Milton Lodge, 2006. "Motivated Skepticism in the Evaluation of Political Beliefs," American Journal of Political Science, John Wiley & Sons, vol. 50(3), pages 755-769, July.
    2. Nilsson, Håkan & Andersson, Patric, 2010. "Making the seemingly impossible appear possible: Effects of conjunction fallacies in evaluations of bets on football games," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 172-180, April.
    3. Andersson, Patric & Ekman, Mattias & Edman, Jan, 2003. "Forecasting the fast and frugal way: A study of performance and information-processing strategies of experts and non-experts when predicting the World Cup 2002 in soccer," SSE/EFI Working Paper Series in Business Administration 2003:9, Stockholm School of Economics.
    4. Brenner, Lyle A. & Koehler, Derek J. & Liberman, Varda & Tversky, Amos, 1996. "Overconfidence in Probability and Frequency Judgments: A Critical Examination," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 212-219, March.
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    Cited by:

    1. Thomas Boyer-Kassem & Sébastien Duchêne & Eric Guerci, 2016. "Quantum-like models cannot account for the conjunction fallacy," Theory and Decision, Springer, vol. 81(4), pages 479-510, November.
    2. Ó Ceallaigh, Diarmaid & Timmons, Shane & Robertson, Deirdre & Lunn, Pete, 2023. "Problem gambling: A narrative review of important policy-relevant issues," Research Series, Economic and Social Research Institute (ESRI), number SUSTAT119, June.

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    More about this item

    Keywords

    Overconfidence bias; Conjunction fallacy; Betting; Probability; Frequency;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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