Economists as experts: Overconfidence in theory and practice
Drawing on research in the psychology of judgment and decision making, I argue that individual economists acting as experts in matters of public policy are likely to be victims of significant overconfidence. The case is based on the pervasiveness of the phenomenon, the nature of the task facing economists-as-experts, and the character of the institutional constraints under which they operate. Moreover, I argue that economist overconfidence can have dramatic consequences. Finally, I explore how the negative consequences of overconfidence can be mitigated, and how the phenomenon can be reduced or eliminated. As a case study, I discuss the involvement of Western experts in post-communist Russian economic reforms.
Volume (Year): 13 (2006)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RJEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RJEC20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rabin, Matthew, 1997.
"Psychology and Economics,"
Department of Economics, Working Paper Series
qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- Dawes, Robyn M. & Mulford, Matthew, 1996. "The False Consensus Effect and Overconfidence: Flaws in Judgment or Flaws in How We Study Judgment?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 201-211, March.
- Daylian M. Cain & George Loewenstein & Don A. Moore, 2005. "The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 1-25, 01.
- Keren, Gideon, 1987. "Facing uncertainty in the game of bridge: A calibration study," Organizational Behavior and Human Decision Processes, Elsevier, vol. 39(1), pages 98-114, February.
- Yates, J. Frank & McDaniel, Linda S. & Brown, Eric S., 1991. "Probabilistic forecasts of stock prices and earnings: The hazards of nascent expertise," Organizational Behavior and Human Decision Processes, Elsevier, vol. 49(1), pages 60-79, June.
- Arkes, Hal R. & Christensen, Caryn & Lai, Cheryl & Blumer, Catherine, 1987. "Two methods of reducing overconfidence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 39(1), pages 133-144, February.
- Brenner, Lyle A. & Koehler, Derek J. & Liberman, Varda & Tversky, Amos, 1996. "Overconfidence in Probability and Frequency Judgments: A Critical Examination," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(3), pages 212-219, March.
When requesting a correction, please mention this item's handle: RePEc:taf:jecmet:v:13:y:2006:i:1:p:1-24. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.