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

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