Economists as experts: Overconfidence in theory and practice
AbstractDrawing on research in the psychology of judgment and decision making, I argue that individual economists acting as experts in matters of public policy are likely to be victims of significant overconfidence. The case is based on the pervasiveness of the phenomenon, the nature of the task facing economists-as-experts, and the character of the institutional constraints under which they operate. Moreover, I argue that economist overconfidence can have dramatic consequences. Finally, I explore how the negative consequences of overconfidence can be mitigated, and how the phenomenon can be reduced or eliminated. As a case study, I discuss the involvement of Western experts in post-communist Russian economic reforms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Economic Methodology.
Volume (Year): 13 (2006)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RJEC20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dawes, Robyn M. & Mulford, Matthew, 1996. "The False Consensus Effect and Overconfidence: Flaws in Judgment or Flaws in How We Study Judgment?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 201-211, March.
- 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.
- Matthew Rabin, 1998.
"Psychology and Economics,"
Journal of Economic Literature,
American Economic Association, vol. 36(1), pages 11-46, March.
- Matthew Rabin., 1997. "Psychology and Economics," Economics Working Papers 97-251, University of California at Berkeley.
- Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Keren, Gideon, 1987. "Facing uncertainty in the game of bridge: A calibration study," Organizational Behavior and Human Decision Processes, Elsevier, vol. 39(1), pages 98-114, February.
- Arkes, Hal R. & Christensen, Caryn & Lai, Cheryl & Blumer, Catherine, 1987. "Two methods of reducing overconfidence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 39(1), pages 133-144, February.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- Yates, J. Frank & McDaniel, Linda S. & Brown, Eric S., 1991. "Probabilistic forecasts of stock prices and earnings: The hazards of nascent expertise," Organizational Behavior and Human Decision Processes, Elsevier, vol. 49(1), pages 60-79, June.
- Daylian M. Cain & George Loewenstein & Don A. Moore, 2005. "The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 1-25, 01.
- van der Cruijsen, Carin A.B. & Eijffinger, Sylvester C.W., 2010. "From actual to perceived transparency: The case of the European Central Bank," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 388-399, June.
- Klaus Mohn, 2010. "Autism in Economics? A Second Opinion," Forum for Social Economics, Springer, vol. 39(2), pages 191-208, July.
- Alessandro Innocenti & Tommaso Nannicini & Roberto Ricciuti, 2012.
"The Importance of Betting Early,"
Labsi Experimental Economics Laboratory University of Siena
037, University of Siena.
- Claussen, Carl Andreas & Matsen, Egil & Røisland, Øistein & Torvik, Ragnar, 2012.
"Overconfidence, monetary policy committees and chairman dominance,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 81(2), pages 699-711.
- Carl Andreas Claussen & Egil Matsen & Øistein Røisland & Ragnar Torvik, 2009. "Overconfidence, Monetary Policy Committees and Chairman Dominance," Working Paper 2009/17, Norges Bank.
- George DeMartino, 2013. "Professional Economic Ethics: Why Heterodox Economists Should Care," Economic Thought, World Economics Association, vol. 2(1), pages 4, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.