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A proper test of overconfidence

Author

Listed:
  • Benoît, Jean-Pierre
  • Dubra, Juan
  • Moore, Don

Abstract

In this paper we conduct two proper tests of overconfidence. We reject the hypothesis "the data cannot be generated by a rational model" in both experiments.

Suggested Citation

  • Benoît, Jean-Pierre & Dubra, Juan & Moore, Don, 2008. "A proper test of overconfidence," MPRA Paper 11954, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:11954
    as

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    File URL: https://mpra.ub.uni-muenchen.de/11954/1/MPRA_paper_11954.pdf
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    References listed on IDEAS

    as
    1. Roland Bénabou & Jean Tirole, 2005. "Self-Confidence and Personal Motivation," International Economic Association Series, in: Bina Agarwal & Alessandro Vercelli (ed.), Psychology, Rationality and Economic Behaviour, chapter 2, pages 19-57, Palgrave Macmillan.
    2. Erik Hoelzl & Aldo Rustichini, 2005. "Overconfident: Do You Put Your Money On It?," Economic Journal, Royal Economic Society, vol. 115(503), pages 305-318, April.
    3. 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.
    4. Botond Köszegi, 2006. "Ego Utility, Overconfidence, and Task Choice," Journal of the European Economic Association, MIT Press, vol. 4(4), pages 673-707, June.
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    Cited by:

    1. Kolotilin, Anton, 2015. "Experimental design to persuade," Games and Economic Behavior, Elsevier, vol. 90(C), pages 215-226.

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    More about this item

    Keywords

    Overconfidence; Better than Average; Experimental Economics; Irrationality; Signalling Models;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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