Does the Better-Than-Average Effect Show That People Are Overconfident?: An Experiment.

Abstract

We conduct a proper test of the claim that people are overconfident, in the sense that they believe that they are better than others. The results of the experiment we present do not allow us to reject the hypotheses that the data has been generated by perfectly rational, unbiased, and appropriately confident agents.Overconfidence; Better than Average; Experimental Economics; Irrationality; Signalling Models