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Does the better –than- average effect show that people are Overconfident?: two experiments

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  • Jean-Pierre Benoit
  • Juan Dubra

    ()

  • Don Moore

Abstract

We conduct two experiments of the claim that people are overconfident, using new tests of overplacement that are based on a formal Bayesian model. Our two experi- ments, on easy quizzes, find overplacement. More precisely, we find apparently over- confident data that cannot be accounted for by a rational population of expected utility maximizers with a good understanding of the nature of the quizzes they took. The finding is of particular interest because Benoit and Dubra (2011) have shown that the vast majority of the existing findings on the better-than-average efect are actually consistent with Bayesian updating.

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Bibliographic Info

Paper provided by Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo. in its series Documentos de Trabajo/Working Papers with number 1301.

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Date of creation: 2013
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Handle: RePEc:mnt:wpaper:1301

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Postal: Prudencio de Pena 2440, Montevideo 11600
Web page: http://www.um.edu.uy/cee/
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Keywords: Overcon?dence; Better than Average; Experimental Economics; Irrationality; Signalling Models.;

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