Does the better -than- average effect show that people are overconfident?: two experiments

Benoit, Jean Pierre; Moore, Done; Dubra, Juan

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URI

https://hdl.handle.net/20.500.12806/1330

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Author

Benoit, Jean Pierre ; Moore, Done ; Dubra, Juan

Editor

Universidad de Montevideo, Facultad de Ciencias Empresariales y Economía, Departamento de Economía

Date

2013

Extensión

31 p.

Abstract

We conduct two experiments of the claim that people are overconfident, using newtests 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 utilitymaximizers 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 thevast majority of the existing findings on the better-than-average e§ect are actuallyconsistent with Bayesian updating.