Does Constructing a Belief Distribution Truly Reduce Overconfidence?

Abstract

Can overconfidence be reduced by asking people to provide a belief distribution over all possible outcomes – that is, by asking them to indicate how likely all possible outcomes are? Although prior research suggests that the answer is “yes,” that research suffers from methodological confounds that muddle its interpretation. In our research, we remove these confounds to investigate whether providing a belief distribution truly reduces overconfidence. In 10 studies, participants made predictions about upcoming sports games or other participants’ preferences, and then indicated their confidence in these predictions using rating scales, likelihood judgments, and/or incentivized wagers. Contrary to prior research, and to our own expectations, we find that providing a belief distribution usually increases overconfidence, because doing so seems to reinforce people’s prior beliefs.

Keywords: overconfidence, belief distribution, judgment under uncertainty, debiasing