Joy leads to Overconfidence â€“ and a Simple Remedy
AbstractJoy is a potential transient cause of overconfidence. We study its effects on absolute and relative overconfidence in an incentive compatible decision experiment. In the experiment, a general knowledge task of medium difficulty is used to measure confidence. We report two main results. First, joy indeed increases the tendency to be overconfident. Second, making an irrelevant cause of joy salient to people (i.e. by showing them a humorous movie clip) leads to well-calibrated judgments. Our results are consistent with the affect-as-information hypothesis, which suggests that affective states with a non-salient and irrelevant cause have an informative function that can lead to biased judgments. However, if the cause of the affective state is salient and obviously irrelevant (i.e. a humorous movie), the informative function is deactivated, leading to better judgments and decisions.
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Date of creation: 03 Jan 2012
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judgment; mood; overconfidence; underconfidence; joy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-25 (All new papers)
- NEP-CBE-2012-01-25 (Cognitive & Behavioural Economics)
- NEP-EXP-2012-01-25 (Experimental Economics)
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