Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129812
Authors: 
Murad, Zahra
Sefton, Martin
Starmer, Chris
Year of Publication: 
2015
Series/Report no.: 
CeDEx Discussion Paper Series 2015-26
Abstract: 
We examine the relationship between confidence in own absolute performance and risk attitudes using two confidence elicitation procedures: self-reported (non-incentivised) confidence and an incentivised procedure that elicits the certainty equivalent of a bet based on performance. The former procedure reproduces the "hard-easy effect" (underconfidence in easy tasks and overconfidence in hard tasks) found in a large number of studies using non-incentivised self-reports. The latter procedure produces general underconfidence, which is significantly reduced, but not eliminated when we filter out the effects of risk attitudes. Finally, we find that self-reported confidence correlates significantly with features of individual risk attitudes including parameters of individual probability weighting.
Subjects: 
overconfidence
underconfidence
experiment
risk preferences
JEL: 
C91
D81
Document Type: 
Working Paper

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