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Overconfidence is universal? Elicitation of genuine overconfidence (EGO) method reveals systematic differences across domain, task knowledge, and incentives in four populations

Muthukrishna, Michael, Henrich, Joseph, Toyokawa, Waturu, Hamamura, Takeshi, Kameda, Tatsuya and Heine, Steven J. (2017) Overconfidence is universal? Elicitation of genuine overconfidence (EGO) method reveals systematic differences across domain, task knowledge, and incentives in four populations. . Department of Psychological and Behavioural Science, London School of Economics and Political Science. (Submitted)

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Identification Number: 10.2139/ssrn.3064202

Abstract

Overconfidence is often assumed to be a human universal, but there remains a dearth of data systematically measuring overconfidence across populations and contexts. Moreover, cross-cultural experiments often fail to distinguish between placement and precision and worse still, often compare population-mean placement estimates rather than individual performance subtracted from placement. Here we introduce a new method for concurrently capturing both placement and precision at an individual level based on individual performance: The Elicitation of Genuine Overconfidence (EGO) method. We conducted experiments using the EGO method, manipulating domain, task knowledge, and incentives across four populations—Japanese, Hong Kong Chinese, Euro Canadians, and East Asian Canadians. We find that previous measures of population-level overconfidence may have been misleading; rather than universal, overconfidence is highly context dependent. Our results reveal cross-cultural differences in sensitivity to incentives and differences in overconfidence strategies, with underconfidence, accuracy, and overconfidence. Comparing sexes, we find inconsistent results for overplacement, but that males are consistently more confident in their placement. These findings have implications for our understanding of the adaptive value of overconfidence and its role in explaining population-level and individual-level differences in economic and psychological behavior.

Item Type: Monograph (Working Paper)
Official URL: https://www.ssrn.com/en/
Additional Information: © 2017 The Authors
Divisions: Psychological and Behavioural Science
Subjects: B Philosophy. Psychology. Religion > BF Psychology
Sets: Departments > Psychological and Behavioural Science
Date Deposited: 02 Mar 2018 12:09
Last Modified: 27 Jan 2020 01:06
URI: http://eprints.lse.ac.uk/id/eprint/86938

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