Confidence, Self-Selection and Bias in the Aggregate

The influence of behavioral biases on aggregate outcomes depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. In betting market, auction and committee experiments, we document that some errors are strongly reduced through self-selection, while others are not affected at all or even amplified. A large part of this variation is explained by differences in the relationship between confidence and performance. In some tasks, they are positively correlated, such that self-selection attenuates errors. In other tasks, rational and biased people are equally confident, such that self-selection has no effects on aggregate quantities. (JEL C91, D44, D91)

• Publication year

  2022

• Venue

  Social Science Research Network

• Publication date

  2022-07-01

• Fields of study

  Not labeled

• Identifiers
  DOI 10.3386/w30262
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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