Confidence, Self-Selection and Bias in the Aggregate /
Benjamin Enke, Thomas Graeber, Ryan Oprea.
- Cambridge, Mass. National Bureau of Economic Research 2022.
- 1 online resource: illustrations (black and white);
- NBER working paper series no. w30262 .
- Working Paper Series (National Bureau of Economic Research) no. w30262. .
July 2022.
The influence of behavioral biases on aggregate outcomes like prices and allocations depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. We conduct a series of betting market, auction and committee experiments using 15 classic cognitive bias tasks. We document that some cognitive errors are strongly reduced through self-selection, while others are not affected at all. A large part of this variation is explained by the quality of people's meta-cognition. In some cognitive tasks, confidence and performance are strongly positively correlated, while for others this link is absent or even negative.
System requirements: Adobe [Acrobat] Reader required for PDF files. Mode of access: World Wide Web.