title: Joy Leads to Overconfidence, and a Simple Countermeasure.
abstract: Overconfidence has been identified as a source of suboptimal decision making in many real-life domains, with often far-reaching consequences. This study identifies a mechanism that can cause overconfidence and demonstrates a simple, effective countermeasure in an incentive-compatible experimental study. We observed that joy induced overconfidence if the reason for joy (an unexpected gift) was unrelated to the judgment task and if participants were not made specifically aware of this mood manipulation. In contrast, we observed well-calibrated judgments among participants in a control group who were in their resting mood. Furthermore, we found well-calibrated judgments among participants who received the joyful mood induction together with questions that forced them to reflect on their current mood and the (ir)relevance of its cause to our judgment tasks. Our findings suggest that being aware of one's positive mood and the reason for that mood may effectively reduce overconfidence for a short period.
authors.affiliation: Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands.|Faculty of Economics and Business, University of Amsterdam, Amsterdam, The Netherlands.|Department of Complex Trait Genetics, Center for Neurogenomics and Cognitive Research, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands.
authors.forename: Philipp
authors.initials: P
authors.lastname: Koellinger
authors.affiliation: School of Industrial Engineering & Innovation Sciences, Eindhoven University of Technology, Eindhoven, The Netherlands.
authors.forename: Theresa
authors.initials: T
authors.lastname: Treffers
mesh_terms: D003657:Decision Making; D005260:Female; D006240:Happiness; D006801:Humans; D008297:Male