Finance Papers

Document Type

Journal Article

Date of this Version

2013

Publication Source

Psychological Science

Volume

24

Issue

7

Start Page

1190

Last Page

1197

DOI

10.1177/0956797612470700

Abstract

Overprecision—an excessive confidence that one knows the truth—is both the most durable and the least understood form of overconfidence. This article outlines an approach to the study of overprecision that avoids some of the methodological problems of other approaches and better reflects the way uncertainty affects choices in everyday life. We measured the precision in judgment implied by people’s tendency to adjust their point estimates of an uncertain quantity in response to the costs of overestimating or underestimating the correct answer. The results revealed robust overprecision. People adjusted their estimates less than they should have given their actual knowledge, and this effect was driven by their subjective confidence.

Copyright/Permission Statement

Albert E. Mannes, Don A. Moore, A Behavioral Demonstration of Overconfidence in Judgment, Psychological Science (Volume 24, Issue 7) pp. 1190-1197. Copyright © 2013 SAGE. Reprinted by permission of SAGE Publications

Embargo Date

5-30-2014

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Date Posted: 27 November 2017

This document has been peer reviewed.