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Do You Know That I Am Biased? An Experiment

  • Sandra Ludwig
  • Julia Nafziger

    ()

This experiment explores whether individuals know that other people are biased. We confirm that overestimation of abilities is a pervasive problem, but observe that most people are not aware of it, i.e. they think others are unbiased. We investigate several explanations for this result. As a first one, we discuss a possible unfamiliarity with the task and the subjects' inability to distinguish between random mistakes and a real bias. Second, we show how the relation between a subject's belief about others and his belief about himself might be driven by a false consensus effect or self-correction mechanism. Third, we identify a self-serving bias when comparing how a subject evaluates his own and other people's biases.

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File URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse11_2007.pdf
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Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse11_2007.

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Length: 28
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:bon:bonedp:bgse11_2007
Contact details of provider: Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

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  1. Pinto, Luis Santos, 2007. "Positive Self-Image in Tournaments," FEUNL Working Paper Series wp510, Universidade Nova de Lisboa, Faculdade de Economia.
  2. Santos-Pinto, Luís, 2003. "Positive self-image and incentives in organizations," MPRA Paper 3141, University Library of Munich, Germany, revised 14 Feb 2007.
  3. Croson, Rachel T. A., 2000. "Thinking like a game theorist: factors affecting the frequency of equilibrium play," Journal of Economic Behavior & Organization, Elsevier, vol. 41(3), pages 299-314, March.
  4. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
  5. 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.
  6. Ulrike Malmendier & Geoffrey Tate, 2005. "CEO Overconfidence and Corporate Investment," Journal of Finance, American Finance Association, vol. 60(6), pages 2661-2700, December.
  7. Eichberger, Jürgen & Kelsey, David & Schipper, Burkhard, 2003. "Ambiguity and Social Interaction," Sonderforschungsbereich 504 Publications 03-30, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  8. Malmendier, Ulrike M. & Tate, Geoffrey, 2003. "Who Makes Acquisitions? CEO Overconfidence and the Market's Reaction," Research Papers 1798, Stanford University, Graduate School of Business.
  9. Matthew Rabin., 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Economics Working Papers E00-279, University of California at Berkeley.
  10. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
  11. Ulrike Malmendier & Geoffrey Tate & Jonathan Yan, 2007. "Corporate Financial Policies With Overconfident Managers," NBER Working Papers 13570, National Bureau of Economic Research, Inc.
  12. Erik Hoelzl & Aldo Rustichini, 2005. "Overconfident: Do You Put Your Money On It?," Economic Journal, Royal Economic Society, vol. 115(503), pages 305-318, 04.
  13. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
  14. Pinto, Luis Santos, 2007. "Positive Self-Image and Incentives in Organizations," FEUNL Working Paper Series wp509, Universidade Nova de Lisboa, Faculdade de Economia.
  15. Santos-Pinto, Luís, 2003. "Positive self-image in tournaments," MPRA Paper 3140, University Library of Munich, Germany, revised 27 Feb 2007.
  16. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
  17. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
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