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Boyer, Martin; De Donder, Philippe; Fluet, Claude; … - 2018

This paper reports survey evidence on long-term care (LTC) risk misperceptions and demand for long-term care insurance (LTCI) in Canada. LTC risk misperceptions is divided into three different risks: needing help for at least one activity of daily life, needing access to a nursing home, and...

Persistent link: https://www.econbiz.de/10011863633

Self-confidence and strategic behavior

Charness, Gary; Rustichini, Aldo; Ven, Jeroen van de - 2013

salient perturbations, we propose a strategic foundation of overconfidence. Since overconfident statements are used in …

Persistent link: https://www.econbiz.de/10010223063

A model of reference-dependent belief updating

Maier, Johannes K.; König, Clemens - 2016

We propose a model of instrumental belief choice under loss aversion. When new information arrives, an agent is prompted to abandon her prior. However, potential posteriors may induce her to take actions that generate a lower utility in some states than actions induced by her prior. These losses...

Persistent link: https://www.econbiz.de/10011557745

Controlling product risks when consumers are heterogeneously overconfident : producer liability vs. minimum quality standard regulation

Baniak, Andrzejj; Grajzl, Peter - 2014

Contributing to the literature on the consequences of behavioral biases for market outcomes and institutional design, we contrast producer liability and minimum quality standard regulation as alternative means of social control of product-related torts when consumers are heterogeneously...

Persistent link: https://www.econbiz.de/10010413791

Illusion of expertise in portfolio decisions : an experimental approach

Fellner, Gerlinde; Güth, Werner; Maciejovsky, Boris - 2001

Overall, 72 subjects invest their endowment in four risky assets. Each com-bination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four...

Persistent link: https://www.econbiz.de/10011408429

Do firms gain from managerial overconfidence? : the role of severance pay

Graziano, Clara; Luporini, Annalisa - 2022

We analyze the effects of optimism and overconfidence when the manager's compensation package includes severance pay … negative effect on profit. Overconfidence, on the contrary, reduces incentive pay as shown by the previous literature, while … its effect on severance pay depends on the intensity of the bias. High values of overconfidence yield an inefficient level …

Persistent link: https://www.econbiz.de/10013255972

Self-serving biases in beliefs about collective outcomes

Kogan, Shimon; Schneider, Florian; Weber, Roberto A. - 2021

Beliefs about collective outcomes, such as economic growth or firm profitability, play an important role in many contexts. We study biases in the formation of such beliefs. Specifically, we explore whether over-optimism and self-serving biases in information processing—documented for beliefs...

Persistent link: https://www.econbiz.de/10012494819

Taxing mobile and overconfident top earners

Haufler, Andreas; Nishimura, Yukihiro - 2020

are not. In this setting we show that overconfidence (i) unambiguously increases the bonus component in the managers … overconfidence can contribute to explaining both the increasing role of bonus contracts and the fall in marginal tax rates for high …

Persistent link: https://www.econbiz.de/10012287316

It's not my fault! : self-confidence and experimentation

Hestermann, Nina; Le Yaouanq, Yves - 2019 - Current draft: October 8, 2018

We study the inference and experimentation problem of an agent in a situation where the outcomes depend on the individual's intrinsic ability and on an external variable. We analyze the mistakes made by decision-makers who hold inaccurate prior beliefs about their ability. Overconfident...

Persistent link: https://www.econbiz.de/10011966912

Disagreement and optimal security design

Ortner, Juan M.; Schmalz, Martin C. - 2018

We study optimal security design when the issuer and market participants agree to disagree about the characteristics of the asset to be securitized. We show that pooling assets can be optimal because it mitigates the effects of disagreement between issuer and investors, whereas tranching a...

Persistent link: https://www.econbiz.de/10011795041