Three Essays on the Effect of Overconfidence on Economic Decision Making (original) (raw)
This dissertation uses experimental evidence to explore the effects of overconfidence on economic decision making. In Chapter 1 I provide experimental evidence of the effects of alcohol on overconfidence and several other important tasks. I also explore the relationship between overconfidence and the behavior in the other tasks. The data from this experiment show that an alcohol level of 0.08 does not have a systemic effect on behavior and more importantly it does not affect ones level of overconfidence. I also show that overconfidence is not significantly correlated with risk preferences, math, strategic behavior, anchoring, altruism, and food choices. In Chapter 2 I use feedback to establish a causal link between overconfidence and trading behavior. Feedback is used to eliminate the possibility for subjects to be overconfident about the accuracy of their signals. The data from this experiment show that overconfidence affects trading volume and profits, but when feedback is provide...
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