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Overconfident Behavior In Informational Cascades: An Eye-Tracking Study

Author

Listed:
  • Alessandro Innocenti
  • Alessandra Rufa
  • Jacopo Semmoloni

Abstract

This paper investigates the validity of the Dual Process theory by using eye-tracking methods to trace the process of attention during a non-preference-based problem solving task, i.e. informational cascades. In this setting, gaze direction may convey evidence on how automatic detection is modified or sustained by controlled search. We provide laboratory evidence that gaze direction is driven by cognitive biases, such as overconfidence. In particular, we find a significant statistical correlation between first fixations and subjects’ actual choices. Our results suggest that attentional strategies are not necessarily consistent with efficient patterns of information collecting.

Suggested Citation

  • Alessandro Innocenti & Alessandra Rufa & Jacopo Semmoloni, 2009. "Overconfident Behavior In Informational Cascades: An Eye-Tracking Study," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 1109, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
    • Handle: RePEc:usi:depfid:1109
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    File URL: http://repec.deps.unisi.it/depfid/text1109.pdf
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    Cited by:

    1. Roberto Di Pietra, 2013. "Book Review," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(3-4), pages 191-201.
    2. Nathaniel J. S. Ashby & Stephan Dickert & Andreas Glockner, 2012. "Focusing on what you own: Biased information uptake due to ownership," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(3), pages 254-267, May.
    3. Cao, Qian & Li, Jianbiao & Niu, Xiaofei, 2019. "The role of overconfidence in overweighting private information: Does gender matter?," EconStor Preprints 203448, ZBW - Leibniz Information Centre for Economics.
    4. repec:cup:judgdm:v:7:y:2012:i:3:p:254-267 is not listed on IDEAS

    More about this item

    Keywords

    dual process theory; eye-tracking; cognitive biases; overconfidence; informational cascades.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics

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