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Does the Better-Than-Average Effect Show That People Are Overconfident?: An Experiment

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  • Benoît, Jean-Pierre
  • Dubra, Juan
  • Moore, Don

Abstract

We conduct a proper test of the claim that people are overconfident, in the sense that they believe that they are better than others. The results of the experiment we present do not allow us to reject the hypotheses that the data has been generated by perfectly rational, unbiased, and appropriately confident agents.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13168.

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Date of creation: 02 Feb 2009
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Handle: RePEc:pra:mprapa:13168

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Keywords: Overconfidence; Better than Average; Experimental Economics; Irrationality; Signalling Models;

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References

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  1. Jean-Pierre Benoit & Juan Dubra, 2008. "Overconfidence," NajEcon Working Paper Reviews, www.najecon.org 122247000000002148, www.najecon.org.
  2. Antonio E. Bernardo & Ivo Welch, 2001. "On the Evolution of Overconfidence and Entrepreneurs," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1307, Cowles Foundation for Research in Economics, Yale University.
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  7. Diego Garcia & Francesco Sangiorgi & Branko Urosevic, 2005. "Overconfidence and Market Efficiency with Heterogeneous Agents," Carlo Alberto Notebooks, Collegio Carlo Alberto 11, Collegio Carlo Alberto.
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  9. Thomas J. Dohmen, 2010. "Do Professionals Choke Under Pressure?," Working Papers id:2742, eSocialSciences.
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  14. Peng, Lin & Xiong, Wei, 2006. "Investor attention, overconfidence and category learning," Journal of Financial Economics, Elsevier, Elsevier, vol. 80(3), pages 563-602, June.
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Cited by:
  1. Néstor Gándelman & Rubén Hernández-Murillo, 2009. "The impact of inflation and unemployment on subjective personal and country evaluations," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue May, pages 107-126.

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