Economics Seminar - "How Robust is Overconfidence"

Abstract: Overconfidence is considered a prominent behavioral bias studied across students, executives, and investors using confidence interval production tasks. Overprecision on these tasks has been deemed the "most robust form of overconfidence". We provide comprehensive new evidence with nearly 2,000 participants, varying confidence interval widths and paradigms. Our results show that far from being robust, overprecision disappears, and even reverses, once we consider narrower interval widths and avoid tricky or difficult knowledge questions. Moreover, we find evidence that overprecision is more commonly associated with being uncertain, rather than being confident, raising concerns about the appropriateness of this standard confidence interval paradigm for measuring overconfidence. After considering this new evidence, we cannot definitively conclude that individuals are on average overconfident.