Social Comparison and Confidence: When Thinking You're Better than Average Predicts Overconfidence

64 Pages Posted: 30 Mar 2006 Last revised: 12 Nov 2012

See all articles by Katherine Alicia Burson

Katherine Alicia Burson

University of Michigan, Stephen M. Ross School of Business

Richard P. Larrick

Duke University - Fuqua School of Business

Jack B. Soll

Duke University - Management

Date Written: July 1, 2005

Abstract

A common social comparison bias -the better-than-average-effect- is frequently described as psychologically equivalent to the individual judgment bias known as overconfidence. However, research has found hard-easy effects for each bias that yield a seemingly paradoxical reversal: Hard tasks tend to produce overconfidence but worse-than-average perceptions, whereas easy tasks tend to produce underconfidence and better-than-average effects. We argue that the two biases are in fact positively related because they share a common psychological basis in subjective feelings of competence, but that the hard-easy reversal is both empirically possible and logically necessary under specifiable conditions. Two studies are presented to support these arguments. We find little support for personality differences in these biases, and conclude that domain-specific feelings of competence account best for their relationship to each other.

Keywords: overconfidence,better than average,accuracy,hard-easy effects

JEL Classification: A00

Suggested Citation

Burson, Katherine Alicia and Larrick, Richard P. and Soll, Jack B., Social Comparison and Confidence: When Thinking You're Better than Average Predicts Overconfidence (July 1, 2005). Ross School of Business Paper No. 1016, Available at SSRN: https://ssrn.com/abstract=894127 or http://dx.doi.org/10.2139/ssrn.894127

Katherine Alicia Burson (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Richard P. Larrick

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

HOME PAGE: http://www.fuqua.duke.edu/faculty/alpha/larrick.htm

Jack B. Soll

Duke University - Management ( email )

Box 90120
Durham, NC 27708-0120
United States
(919) 660-7858 (Phone)

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