IDEAS home Printed from https://ideas.repec.org/a/bla/manchs/v91y2023i5p389-413.html

Environment, alcohol intoxication and overconfidence: Evidence from a lab‐in‐the‐field experiment

Author

Listed:
  • Iain W. Long
  • Kent Matthews
  • Vaseekaran Sivarajasingam

Abstract

Alcohol has long been known as the demon drink; an epithet owed to the numerous social ills it is associated with. Our lab‐in‐the‐field experiment assesses the extent to which changes in intoxication and an individual's environment lead to changes in overconfidence or cognitive ability that are, in turn, often linked to problematic behaviours. Results indicate that it is the joint effect of being intoxicated in a bar, rather than simply being intoxicated, that matters. Subjects systematically underestimated the magnitude of their behavioural changes, suggesting that they cannot be held fully accountable for their actions.

Suggested Citation

  • Iain W. Long & Kent Matthews & Vaseekaran Sivarajasingam, 2023. "Environment, alcohol intoxication and overconfidence: Evidence from a lab‐in‐the‐field experiment," Manchester School, University of Manchester, vol. 91(5), pages 389-413, September.
    • Handle: RePEc:bla:manchs:v:91:y:2023:i:5:p:389-413
    DOI: 10.1111/manc.12439
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/manc.12439
    Download Restriction: no
    File URL: https://libkey.io/10.1111/manc.12439?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sara Markowitz, 2000. "The Price of Alcohol, Wife Abuse, and Husband Abuse," Southern Economic Journal, John Wiley & Sons, vol. 67(2), pages 279-303, October.
    2. Jose A. Scheinkman & Wei Xiong, 2003. "Overconfidence and Speculative Bubbles," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1183-1219, December.
    3. Markowitz Sara & Poe-Yamagata Eileen & Andrews Tracy & Deb Partha & Nesson Erik & Florence Curtis & Barnett Sarah Beth L., 2012. "Estimating the Relationship between Alcohol Policies and Criminal Violence and Victimization," German Economic Review, De Gruyter, vol. 13(4), pages 416-435, December.
    4. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    5. Luca Corazzini & Antonio Filippin & Paolo Vanin, 2015. "Economic Behavior under the Influence of Alcohol: An Experiment on Time Preferences, Risk-Taking, and Altruism," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-25, April.
    6. Yaron Azrieli & Christopher P. Chambers & Paul J. Healy, 2018. "Incentives in Experiments: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1472-1503.
    7. Jeremy Clark & Lana Friesen, 2009. "Overconfidence in Forecasts of Own Performance: An Experimental Study," Economic Journal, Royal Economic Society, vol. 119(534), pages 229-251, January.
    8. Klajdi Bregu & Cary Deck & Lindsay Ham & Salar Jahedi, 2017. "The Effects of Alcohol Use on Economic Decision Making," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 886-902, April.
    9. Charness, Gary & Gneezy, Uri & Halladay, Brianna, 2016. "Experimental methods: Pay one or pay all," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 141-150.
    10. Herz, Holger & Schunk, Daniel & Zehnder, Christian, 2014. "How do judgmental overconfidence and overoptimism shape innovative activity?," Games and Economic Behavior, Elsevier, vol. 83(C), pages 1-23.
    11. Chen, Si & Schildberg-Hörisch, Hannah, 2019. "Looking at the bright side: The motivational value of confidence," European Economic Review, Elsevier, vol. 120(C).
    12. Markowitz, Sara & Grossman, Michael, 2000. "The effects of beer taxes on physical child abuse," Journal of Health Economics, Elsevier, vol. 19(2), pages 271-282, March.
    13. Dan Lovallo & Colin Camerer, 1999. "Overconfidence and Excess Entry: An Experimental Approach," American Economic Review, American Economic Association, vol. 89(1), pages 306-318, March.
    14. Malmendier, Ulrike & Tate, Geoffrey, 2008. "Who makes acquisitions? CEO overconfidence and the market's reaction," Journal of Financial Economics, Elsevier, vol. 89(1), pages 20-43, July.
    15. Markowitz, Sara, 2005. "Alcohol, Drugs and Violent Crime," International Review of Law and Economics, Elsevier, vol. 25(1), pages 20-44, March.
    16. Fellner, Gerlinde & Krügel, Sebastian, 2012. "Judgmental overconfidence: Three measures, one bias?," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 142-154.
    17. Sara Markowitz & Erik Nesson & Eileen Poe-Yamagata & Curtis Florence & Tracy Roberts & Sarah Beth Link, 2012. "Estimating the Relationship between Alcohol Policies and Youth Violence," Working Papers 201205, Ball State University, Department of Economics, revised Jun 2012.
    18. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    19. Kent Daniel & David Hirshleifer, 2015. "Overconfident Investors, Predictable Returns, and Excessive Trading," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 61-88, Fall.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Long, Iain W & Matthews, Kent & Sivarajasingam, Vaseekaran, 2022. "Overconfidence, Alcohol and the Environment: Evidence from a Lab-in-the-Field Experiment," Cardiff Economics Working Papers E2022/6, Cardiff University, Cardiff Business School, Economics Section.
    2. Helen X. H. Bao & Steven Haotong Li, 2016. "Overconfidence And Real Estate Research: A Survey Of The Literature," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-24, September.
    3. Long, Iain W & Matthews, Kent & Sivarajasingam, Vaseekaran, 2019. "Behavioural Change and Alcohol-Fuelled Violence: A Field Experiment," Cardiff Economics Working Papers E2019/9, Cardiff University, Cardiff Business School, Economics Section.
    4. Erik Nesson & Vinish Shrestha, 2021. "The effects of false identification laws on underage alcohol‐related traffic fatalities," Health Economics, John Wiley & Sons, Ltd., vol. 30(9), pages 2264-2283, September.
    5. repec:plo:pone00:0139344 is not listed on IDEAS
    6. Marius Protte, 2025. "Explaining Apparently Inaccurate Self-assessments of Relative Performance: A Replication and Adaptation of 'Overconfident: Do you put your money on it?' by Hoelzl and Rustichini (2005)," Papers 2507.15568, arXiv.org.
    7. Stephen L. Cheung & Lachlan Johnstone, 2025. "True overconfidence, revealed through actions: An experiment," Journal of Risk and Uncertainty, Springer, vol. 70(2), pages 171-199, April.
    8. Danz, David, 2020. "Never underestimate your opponent: Hindsight bias causes overplacement and overentry into competition," Games and Economic Behavior, Elsevier, vol. 124(C), pages 588-603.
    9. Derek Lemoine, 2025. "Rationally misplaced confidence," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 80(1), pages 1-38, August.
    10. Zahra Murad & Martin Sefton & Chris Starmer, 2016. "How do risk attitudes affect measured confidence?," Journal of Risk and Uncertainty, Springer, vol. 52(1), pages 21-46, February.
    11. Jonathan F Schulz & Christian Thöni, 2016. "Overconfidence and Career Choice," PLOS ONE, Public Library of Science, vol. 11(1), pages 1-8, January.
    12. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    13. Raphael Guber & Martin G. Kocher & Joachim Winter, 2021. "Does having insurance change individuals' self‐confidence?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(2), pages 429-442, June.
    14. Monica Deza, 2015. "The Effects of Alcohol on the Consumption of Hard Drugs: Regression Discontinuity Evidence from the National Longitudinal Study of Youth, 1997," Health Economics, John Wiley & Sons, Ltd., vol. 24(4), pages 419-438, April.
    15. Mohammed Abdellaoui & Han Bleichrodt & Cédric Gutierrez, 2023. "Unpacking Overconfident Behavior When Betting on Oneself," Post-Print hal-04383402, HAL.
    16. Cook, Philip J. & Durrance, Christine Piette, 2013. "The virtuous tax: Lifesaving and crime-prevention effects of the 1991 federal alcohol-tax increase," Journal of Health Economics, Elsevier, vol. 32(1), pages 261-267.
    17. Zachary Breig & Matthew Gibson & Jeffrey Shrader, 2019. "Why Do We Procrastinate? Present Bias and Optimism," Department of Economics Working Papers 2019-15, Department of Economics, Williams College.
    18. Bregu, Klajdi, 2020. "Overconfidence and (Over)Trading: The Effect of Feedback on Trading Behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 88(C).
    19. Benigno, Pierpaolo & Karantounias, Anastasios G., 2019. "Overconfidence, subjective perception and pricing behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 107-132.
    20. Yong-Ho Cheon & Kuan-Hui Lee, 2018. "Maxing Out Globally: Individualism, Investor Attention, and the Cross Section of Expected Stock Returns," Management Science, INFORMS, vol. 64(12), pages 5807-5831, December.
    21. Wen, Hefei & Hockenberry, Jason M. & Cummings, Janet R., 2017. "The effect of Medicaid expansion on crime reduction: Evidence from HIFA-waiver expansions," Journal of Public Economics, Elsevier, vol. 154(C), pages 67-94.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manchs:v:91:y:2023:i:5:p:389-413. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.