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The Evolutionary Stability of Optimism, Pessimism and Complete Ignorance

Schipper, Burkhard C. - University of Bonn, Germany - 2005

We provide an evolutionary foundation to evidence that in some situations humans maintain optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents' actions and maximize...

Persistent link: https://www.econbiz.de/10004989630

Is Online Trading Gambling with Peanuts?

Anderson, Anders - Institute for Financial Research (SIFR) - 2008

If individuals derive a small utility from gambling, we should observe high turnover in stock portfolios that are of only marginal importance to them. By the use of detailed individual financial data, as weIl as trades from a Swedish online broker, we measure the frequency and cost of online...

Persistent link: https://www.econbiz.de/10004991065

Financial professionals' overconfidence:Is it experience, function, or attitude?

Gloede, Oliver; Menkhoff, Lukas - Wirtschaftswissenschaftliche Fakultät, Leibniz … - 2011

This paper examines financial professionals' overconfidence in their forecasting performance. We compare individuals … sample show overconfidence on average, although to a moderate degree, including many cases of underconfidence. In analyzing … this, we find that working experience is accompanied by less overconfidence. Function is also related to less …

Persistent link: https://www.econbiz.de/10004967269

Do You Know That I Am Biased? An Experiment

Ludwig, Sandra; Nafziger, Julia - University of Bonn, Germany - 2007

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/10004968372

Behavioural Theories of the Business Cycle

Jaimovich, Nir; Rebelo, Sérgio - C.E.P.R. Discussion Papers - 2006

and overconfidence. The expectations of optimistic agents are biased toward good outcomes, while overconfident agents … overestimate the precision of the signals that they receive. Both expectation shocks and overconfidence can increase business …

Persistent link: https://www.econbiz.de/10005792149

Visualisation of data in management accounting reports

Hirsch, Bernhard; Seubert, Anna; Sohn, Matthias - In: Journal of Applied Accounting Research 16 (2015) 2, pp. 221-239

Purpose – Managers are confronted with increasing information overload and growing pressure for effective and efficient decision making. The visualisation of data represents a way to overcome this dilemma and to improve management decision quality. The purpose of this paper is to transfer...

Persistent link: https://www.econbiz.de/10014838108

Overconfidence and trading volume

Glaser, Markus; Weber, Martin - In: The Geneva Papers on Risk and Insurance Theory 32 (2007) 1, pp. 1-36

hypothesis by correlating individual overconfidence scores with several measures of trading volume of individual investors … facets of overconfidence (miscalibration, volatility estimates, better than average effect). The measures of trading volume … the calibration literature and model overconfidence as underestimation of the variance of signals. In connection with …

Persistent link: https://www.econbiz.de/10005722868

Banker Compensation and Confirmation Bias

Sabourian, Hamid; Sibert, Anne - C.E.P.R. Discussion Papers - 2009

Confirmation bias refers to cognitive errors that bias one towards one's own prior beliefs. A vast empirical literature documents its existence and psychologists identify it as one of the most problematic aspects of human reasoning. In this paper, we present three related scenarios where...

Persistent link: https://www.econbiz.de/10005661569

Great Expectations: Past Wages and Unemployment Durations

Böheim, René; Horvath, Gerard Thomas; Winter-Ebmer, Rudolf - Institut für Volkswirtschaftslehre, … - 2010

profited from high firm rents in the past. We interpret our findings as evidence for overconfidence generated by imperfectly …

Persistent link: https://www.econbiz.de/10008484493

A Simple Model of Self-Assessments

Martinez, Silvia Dominguez; Swank, Otto H. - Tinbergen Instituut - 2006

We develop a simple model that describes individuals’ self-assessments oftheir abilities. We assume that individuals learn about their abilities from appraisalsof others and experience. Our model predicts that if communicationis imperfect, then (i) appraisals of others tend to be too positive,...

Persistent link: https://www.econbiz.de/10011257106