Better than average: An investigation of overconfidence in South Africa

Includes bibliographical references.This dissertation examines overconfidence in an investing environment to determine if there is evidence of the phenomenon amongst a sample of academics at participating universities. A survey was sent out to over 6 000 staff members at four South African universities assessing respondents’ ability to estimate their return earned in unit trusts in which they were invested, as well as assessing whether they would adjust their estimate when presented with an anchor (the relevant JSE All Share Index return). 466 completed responses were obtained, of which 81 respondents indicated that they were invested directly in a South African equity unit trust to allow for statistical testing. The data obtained were analysed for evidence of overconfidence and anchoring by comparing respondents’ estimates of fund returns against historical returns and then checking whether they adjusted their estimate after being presented with an anchor. It was found that investors were under-confident rather than overconfident with women giving lower, and thus more under-confident estimates than their male counterparts. Furthermore, it was found that older respondents were better able to estimate their past returns than younger respondents. The presence of an anchor appeared to have no effect on respondents’ estimates

A problem solving system employing a formal approach to means

The thesis describes the theory and design of a general problem-solving system. The system uses a single general heuristic based on a formal definition of differences within the framework of means/ends analysis and employs tree search during problem solution. A comparison is made with two other systems using means/ends analysis. The conditions under which the system is capable of solving problems are investigated and the efficiency of the system is considered. The system has solved a variety of problems of varying complexity and the difference heuristic appears comparatively accurate for goal-directed search within certain limits