Does the better –than- average effect show that people are Overconfident?: two experiments
We conduct two experiments of the claim that people are overconfident, using new tests of overplacement that are based on a formal Bayesian model. Our two experi- ments, on easy quizzes, find overplacement. More precisely, we find apparently over- confident data that cannot be accounted for by a rational population of expected utility maximizers with a good understanding of the nature of the quizzes they took. The finding is of particular interest because Benoit and Dubra (2011) have shown that the vast majority of the existing findings on the better-than-average efect are actually consistent with Bayesian updating.
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