Does the better –than- average effect show that people are Overconfident?: two experiments
AbstractWe 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 InfoPaper provided by Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo. in its series Documentos de Trabajo/Working Papers with number 1301.
Date of creation: 2013
Date of revision:
Overcon?dence; Better than Average; Experimental Economics; Irrationality; Signalling Models.;
Other versions of this item:
- Benoît, Jean-Pierre & Dubra, Juan & Moore, Don, 2009. "Does the Better-Than-Average Effect Show That People Are Overconfident?: Two Experiments," MPRA Paper 44956, University Library of Munich, Germany, revised 11 Mar 2013.
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-04 (All new papers)
- NEP-CBE-2013-06-04 (Cognitive & Behavioural Economics)
- NEP-EXP-2013-06-04 (Experimental Economics)
- NEP-UPT-2013-06-04 (Utility Models & Prospect Theory)
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