Should observed overconfidence be dismissed as a statistical artifact? Critique of Erev, Wallsten, and Budescu (1994)
I. Erev, T. S. Wallsten, and D. V. Budescu (1994) showed that the same probability judgment data can reveal both apparent overconfidence and underconfidence, depending on how the data are analyzed. To explain this seeming paradox, I. Erev et al. proposed a general model of judgment in which overt responses are related to underlying "true judgments" that are perturbed by error. A central conclusion of their work is that observed over- and underconfidence can be split into two components: (a) "true" over- and underconfidence and (b) "artifactual" over- and underconfidence due to error in judgment. It is argued in the present article that decomposing over- and underconfidence into true and artifactual components is inappropriate. The mistake stems from giving primacy to ambiguously defined model constructions (true judgments) over observed data.
Brenner
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Warrington College of Business Administration, University of Florida, USA. lyle@rice.edu
D006801:Humans; D007600:Judgment; D011582:Psychological Theory; D012649:Self Concept