Does Constructing a Belief Distribution Truly Reduce Overconfidence?

Forthcoming at Journal of Experimental Psychology: General

53 Pages Posted: 21 Sep 2022

See all articles by Beidi Hu

Beidi Hu

University of Pennsylvania - The Wharton School

Joseph P. Simmons

University of Pennsylvania - The Wharton School

Date Written: June 6, 2022

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

Suggested Citation

Hu, Beidi and Simmons, Joseph P., Does Constructing a Belief Distribution Truly Reduce Overconfidence? (June 6, 2022). Forthcoming at Journal of Experimental Psychology: General, Available at SSRN: https://ssrn.com/abstract=4180883

Beidi Hu (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3730 Walnut Street
Philadelphia, PA 19104-6365
United States

Joseph P. Simmons

University of Pennsylvania - The Wharton School ( email )

3733 Spruce Street
Philadelphia, PA 19104-6374
United States

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