Reducing within-group overconfidence through group identity and between-group confidence judgments

•The salience of inter-group judgments reduces within-group overconfidence.•Group identity reduces within-group overconfidence.•Team building and inter-group comparisons can improve calibration.

Individuals belonging to a social group make judgments about their relative standing within the group as well as about the relative standing of their group among other groups. On average, individuals exhibit overconfidence bias in both types of judgments in a variety of settings. We hypothesize, however, that the latter bias counteracts the former; therefore, the salience of between-group judgments should mitigate within-group overconfidence. Our second hypothesis is that within-group overconfidence is reduced in the presence of group identity. Using a 2 × 2 between-subject design, we test, and find strong support for, these hypotheses in a laboratory experiment.