No Overconfidence?
New data question the claim that people tend to overestimate their abilities:
A large body of literature purports to find that people are generally overconfident. In particular, a better-than-average effect in which a majority of people claim to be superior to the average person has been noted for a wide range of skills, from driving, to spoken expression, to the ability to get along with others, to test taking on simple tests. The literature generally accepts that this better-than-average effect is indicative of inflated self- assessments. However, [we] recently … show that the better-than-average data … does not indicate … people have made some kind of error in their self-evaluations. Because of this reason, almost none of the existing experimental literature on relative overconfidence can actually claim to have found overconfidence. … In this paper, we report on an experiment designed to provide a proper test of overconfidence. … As in much previous experimental work, we find a better-than-average effect among our subjects. … We find evidence that subjects are uncertain of their own types. Our experiment can be viewed as a test of the null hypothesis that people are behaving rationally (and are not overconfident). We cannot reject that hypothesis.
I meant to say that in Svenson's study, 82.5% of the people placed themselves in the top 30% (not the top half as I said in my previous post). So there was no reason to expect that only 52% would place themselves in the top 30%. So adding this fact, the self selection recruitment, and the high motivation, we think we gave overconfidence a "fair shot" to reveal itself (as the person in the first post asks).
Hi to all, and thanks for your interest.
Regarding the first comment: first of all, we developed a theory of what would constitute a proper test of overconfidence. With this theory, we found that the two tests which were properly run found no overconfidence (tests based on "scales"; I know of no other tests that would be proper tests). Also, our theory allowed us to build the proper test that is referenced in the original post. We run the two treatments referenced in the firt comment because we sort of expected to find overconfidence: people took the original Svenson study quite seriously, and his data showed that 82.5% of the people placed themselves in the top half of the population; we selected people using a "self selection" advertisement (as in Camerer and Lovallo's AER paper) expecting to push people further into being more overconfident; finally, we had a treatment with "high motivation" which we expected to have the effect of making people more overconfident.
Regarding Chris's comment: we take care of that issue in the paper.
Regarding Zubon's comment: that is a good idea; you should look at Dunning's papers (the ones we reference in our work).
best to allJuan