It is common for a majority of people to rank themselves as better than average on simple tasks and worse than average on dificult tasks. The literature takes for granted that this apparent miscon?dence is problematic. We argue, however, that this behaviour is consistent with purely rational Bayesian updaters. In fact, better-than-average data by itself cannot be used to show overcon?dence; we indicate which type of data can be used. Our theory is consistent with empirical patterns found in the literature.
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Volume (Year): 79 (2011)
Issue (Month): 5 (09)
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