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Grade Expectations: Rationality and Overconfidence

Author

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  • Jan R. Magnus

    (Vrije Universiteit Amsterdam and Tinbergen Institute, The Netherlands)

  • Anatoly A. Peresetsky

    (National Research University Higher School of Economics, Moscow, Russia)

Abstract

Overconfidence seems to be an essential aspect of human nature, and one way to study overconfidence is to consider students' forecasts of their exam grades. Part of a student's grade expectation is based on the student's previous academic achievements; what remains can be interpreted as (over)confidence. In this paper we study overconfidence using a sample of about five hundred second-year undergraduate students enrolled in a statistics course in Moscow. The course contains three exams and each student produces a forecast for each of the three exams. Students' expectations are not rational and most of students are overconfident, which is in agreement with what most people find. Less obvious findings are that overconfidence is helpful: given the same academic achievement students with larger confidence get higher exam grades. Female students are less overconfident than male students, their forecasts are more rational, and they are also faster learners in the sense that they adjust their expectations more rapidly.

Suggested Citation

  • Jan R. Magnus & Anatoly A. Peresetsky, 2017. "Grade Expectations: Rationality and Overconfidence," Tinbergen Institute Discussion Papers 17-054/III, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20170054
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    File URL: https://papers.tinbergen.nl/17054.pdf
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    References listed on IDEAS

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    2. Belayet Hossain & Panagiotis Tsigaris, 2015. "Are grade expectations rational? A classroom experiment," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 199-212, April.
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    5. Charles Ballard & Marianne Johnson, 2005. "Gender, Expectations, And Grades In Introductory Microeconomics At A Us University," Feminist Economics, Taylor & Francis Journals, vol. 11(1), pages 95-122.
    6. Calvin Blackwell, 2010. "Rational Expectations in the Classroom: A Learning Activity," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 10(2), pages 1-6, Fall.
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    8. Niklas Jakobsson, 2012. "Gender and confidence: are women underconfident?," Applied Economics Letters, Taylor & Francis Journals, vol. 19(11), pages 1057-1059, July.
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    Cited by:

    1. Gerardo Sabater-Grande & Nikolaos Georgantzís & Noemí Herranz-Zarzoso, 2023. "Goals and guesses as reference points: a field experiment on student performance," Theory and Decision, Springer, vol. 94(2), pages 249-274, February.
    2. Jan R. Magnus & Anatoly A. Peresetsky, 2021. "A statistical explanation of the Dunning-Kruger effect," Working Papers w0286, New Economic School (NES).
    3. Noemí Herranz-Zarzoso & Gerardo Sabater-Grande, 2020. "Monetary incentives and overconfidence in academic performance: An experimental study," Working Papers 2020/14, Economics Department, Universitat Jaume I, Castellón (Spain).

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    More about this item

    Keywords

    Rational expectations; Classroom experiment; Overconfidence; Gender difference; Persistence;
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