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This paper investigates collective denial and willful blindness in groups, organizations and markets. Agents with anticipatory preferences, linked through an interaction structure, choose how to interpret and recall public signals about future prospects. Wishful thinking (denial of bad news) is...
Persistent link: https://www.econbiz.de/10010704406
We investigate whether overconfidence is affected by superstitious beliefs and whether the effect is heterogeneous … overconfidence is positively affected by being assigned to a lucky number. Interestingly, males and females react differently …: females’ overconfidence tends to be negatively affected when assigned to unlucky numbers, while they are not affected by being …
Persistent link: https://www.econbiz.de/10011117223
We examine consumer certainty of future preferences and overconfidence in predicting future preferences. We explore how … preference certainty and overconfidence impact the option value to revise today’s decisions in the future. We design a laboratory … overconfidence in predicting future preferences as: the difference between actual accuracy at predicting future choices and stated …
Persistent link: https://www.econbiz.de/10011194377
I develop a model of (individually rational) collective reality denial in groups, organizations and markets. Whether participants' tendencies toward wishful thinking reinforce or dampen each other is shown to hinge on a simple and novel mechanism. When an agent can expect to benefit from other's...
Persistent link: https://www.econbiz.de/10005666620
models of social learning to investigate the micro-level mechanisms. We find that overconfidence and conservatism contribute …
Persistent link: https://www.econbiz.de/10011816763
I investigate whether two mechanisms leading to biased beliefs about success, overconfidence and competition neglect … distributions related to absolute as well as relative overconfidence to study it comprehensively and introduce two treatment … variations: First, some participants receive detailed performance feedback addressing absolute and relative overconfidence before …
Persistent link: https://www.econbiz.de/10011932952
This experiment explores whether individuals know that other people are biased. We confirm that overestimation of abilities is a pervasive problem, but observe that most people are not aware of it, i.e. they think others are unbiased. We investigate several explanations for this result. As a...
Persistent link: https://www.econbiz.de/10010264906
Overconfidence is one of the most ubiquitous cognitive bias. There is copious evidence of overconfidence being relevant … overconfidence. Cognitive uncertainty represents a decision maker's uncertainty about her action optimality. We present a simple … model of overconfidence based on the concept of cognitive uncertainty. The model relates the concepts theoretically and …
Persistent link: https://www.econbiz.de/10013339105
holding positive beliefs. This finding provides a behavioral explanation why and how overconfidence can evolve in the presence …
Persistent link: https://www.econbiz.de/10013470445
overconfidence and overentry into competition. In a broader context, the results provide an explanation for the overconfidence of …
Persistent link: https://www.econbiz.de/10010396967