Overconfidence in Forecasts of Own Performance: An Experimental Study

Clark, Jeremy and Friesen, Lana (2009) Overconfidence in Forecasts of Own Performance: An Experimental Study. The Economic Journal, 119 534: 229-251. doi:10.1111/j.1468-0297.2008.02211.x

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Author Clark, Jeremy
Friesen, Lana
Title Overconfidence in Forecasts of Own Performance: An Experimental Study
Journal name The Economic Journal   Check publisher's open access policy
ISSN 0013-0133
Publication date 2009-01
Year available 2008
Sub-type Article (original research)
DOI 10.1111/j.1468-0297.2008.02211.x
Volume 119
Issue 534
Start page 229
End page 251
Total pages 23
Editor A. Scott
S. Machin
Place of publication Oxford, England
Publisher Blackwell Publishing
Collection year 2009
Language eng
Subject C1
910209 Preference, Behaviour and Welfare
140206 Experimental Economics
Abstract Systematic overconfidence by individuals regarding their abilities and prospects could have important economic consequences. But overconfidence has received little direct testing within economics. We use experiments to test for overconfidence in people's forecasts of their absolute or relative performance in two unfamiliar tasks. Given their chosen effort, participants have incentives to forecast accurately, with opportunities for feedback, learning and revision. Forecasts are evaluated at aggregate and individual levels. We find zero mean error or underconfidence far more prevalent than overconfidence. Underconfidence is greatest in forecasts of absolute rather than relative performance and among those using greater effort quantity or quality.
Keyword Future life events
Unrealistic Optimism
Risk perceptions
Health problems
Q-Index Code C1
Q-Index Status Confirmed Code
Additional Notes Published Online: 9 Dec 2008

Document type: Journal Article
Sub-type: Article (original research)
Collections: 2009 Higher Education Research Data Collection
ERA 2012 Admin Only
School of Economics Publications
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Citation counts: TR Web of Science Citation Count  Cited 22 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 26 times in Scopus Article | Citations
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Created: Fri, 27 Feb 2009, 16:28:00 EST by Dr Lana Friesen on behalf of School of Economics