Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1017634 | Journal of Business Research | 2014 | 5 Pages |
Abstract
Psychological studies are frequently cited in the business and finance literature to bolster claims that various kinds of economic disasters, from the large proportion of start-ups that quickly go out of business to the exaggerated confidence of financial investors, can be attributed to overconfidence. This article reviews some of the problems associated with concluding that people overestimate the accuracy of their judgments based on observed overconfidence measured as the difference between mean subjective probability and proportion correct. Methodological and statistical artifacts, such as regression, can explain many of the observed instances of apparent overconfidence.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
Henrik Olsson,