Can overconfidence be debiased by low-probability/high-consequence events?

The Effect of Overconfidence on Persistent Behavior: The Mediation Effect of "I Think I Can Do It" Rather Than "I'm Attracted To It"

The present study explored the effects of state overconfidence on persistent behavior with consideration of feasibility and desirability as mediators. The persistent behaviors of 61 participants (35 women, 26 men; M age = 20.9 yr, SD = 1.9), placed in overconfidence and under-confidence groups based on random positive or negative bogus feedback, were measured. Results showed that participants with overconfidence were more persistent in solving problems than were those with under-confidence. Further mediation analyses revealed that the rating of the feasibility rather than the desirability of the task mediated the influence of state overconfidence on persistent behaviors. These findings provided future support for the self-justification hypothesis, and addressed arguments regarding the origins of overconfidence.

Peer-comparison overconfidence: Does it measure bias in self-evaluation?

Overconfidence is generally regarded as one of the most robust findings in the psychology of judgment. A precise method for evaluating overconfidence is essential if researchers are to validate these findings. Although peer-comparison questions are a convenient tool for measuring overconfidence, their validity has been questioned. We employed a specific paradigm to verify the validity, and the respondents were asked to predict a verifiable future event in a real-world setting that allowed empirical checking and comparison between the actual result and the prediction. Studies 1 and 2 found that the actual percentile of overconfidence could be accurately predicted using our initial calculation of participants' peer-comparison overconfidence in answering questions about academic performance. Study 3 found a similar effect when using questions related to job hunting. All studies indicated that peer-comparison questions are valid for measuring bias in self-evaluation. Thus, future studies could employ peer-comparison questions to investigate the domain specificity versus the domain generality of overconfidence.

Optimism Following a Tornado Disaster

Effects of exposure to a severe weather disaster on perceived future vulnerability were assessed in college students, local residents contacted through random-digit dialing, and community residents of affected versus unaffected neighborhoods. Students and community residents reported being less vulnerable than their peers at 1 month, 6 months, and 1 year after the disaster. In Studies 1 and 2, absolute risk estimates were more optimistic with time, whereas comparative vulnerability was stable. Residents of affected neighborhoods (Study 3), surprisingly, reported less comparative vulnerability and lower “gut-level” numerical likelihood estimates at 6 months, but later their estimates resembled the unaffected residents. Likelihood estimates (10%-12%), however, exceeded the 1% risk calculated by storm experts, and gut-level versus statistical-level estimates were more optimistic. Although people believed they had approximately a 1-in-10 chance of injury from future tornadoes (i.e., an overestimate), they thought their risk was lower than peers.

Victims' time discounting 2.5 years after the Wenchuan earthquake: an ERP study

BACKGROUND

Time discounting refers to the fact that the subjective value of a reward decreases as the delay until its occurrence increases. The present study investigated how time discounting has been affected in survivors of the magnitude-8.0 Wenchuan earthquake that occurred in China in 2008.

METHODOLOGY

Nineteen earthquake survivors and 22 controls, all school teachers, participated in the study. Event-related brain potentials (ERPs) for time discounting tasks involving gains and losses were acquired in both the victims and controls.

FINDINGS

The behavioral data replicated our previous findings that delayed gains were discounted more steeply after a disaster. ERP results revealed that the P200 and P300 amplitudes were increased in earthquake survivors. There was a significant group (earthquake vs. non-earthquake) × task (gain vs. loss) interaction for the N300 amplitude, with a marginally significantly reduced N300 for gain tasks in the experimental group, which may suggest a deficiency in inhibitory control for gains among victims.

CONCLUSIONS

The results suggest that post-disaster decisions might involve more emotional (System 1) and less rational thinking (System 2) in terms of a dual-process model of decision making. The implications for post-disaster intervention and management are also discussed.