IDEAS home Printed from https://ideas.repec.org/a/eee/ireced/v36y2021ics1477388020300359.html
   My bibliography  Save this article

Economics 101-ism and the Dunning-Kruger effect: Reducing overconfidence among introductory macroeconomics students

Author

Listed:
  • Sawler, James

Abstract

In numerous subjects, people with the least knowledge also lack the ability to assess how much they don’t know. Specifically, the less competent the individual, the greater is their overconfidence in their knowledge - the Dunning-Kruger effect. However, in order for the incompetent to overestimate their knowledge, they must satisfy a minimal threshold of knowledge that suggests to themselves that they can generate correct answers.

Suggested Citation

  • Sawler, James, 2021. "Economics 101-ism and the Dunning-Kruger effect: Reducing overconfidence among introductory macroeconomics students," International Review of Economics Education, Elsevier, vol. 36(C).
    • Handle: RePEc:eee:ireced:v:36:y:2021:i:c:s1477388020300359
    DOI: 10.1016/j.iree.2020.100208
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1477388020300359
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iree.2020.100208?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Malmendier, Ulrike & Tate, Geoffrey, 2008. "Who makes acquisitions? CEO overconfidence and the market's reaction," Journal of Financial Economics, Elsevier, vol. 89(1), pages 20-43, July.
    2. Krajc, Marian & Ortmann, Andreas, 2008. "Are the unskilled really that unaware? An alternative explanation," Journal of Economic Psychology, Elsevier, vol. 29(5), pages 724-738, November.
    3. Ulrike Malmendier & Geoffrey Tate, 2005. "CEO Overconfidence and Corporate Investment," Journal of Finance, American Finance Association, vol. 60(6), pages 2661-2700, December.
    4. Atish R. Ghosh & Jun I. Kim & Enrique G. Mendoza & Jonathan D. Ostry & Mahvash S. Qureshi, 2013. "Fiscal Fatigue, Fiscal Space and Debt Sustainability in Advanced Economies," Economic Journal, Royal Economic Society, vol. 0, pages 4-30, February.
    5. Belayet Hossain & Panagiotis Tsigaris, 2015. "Are grade expectations rational? A classroom experiment," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 199-212, April.
    6. Joseph Stiglitz, 2011. "The Failure of Macroeconomics in America," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 19(5), pages 17-30, September.
    7. Clifford Nowell & Richard M. Alston, 2007. "I Thought I Got an A! Overconfidence Across the Economics Curriculum," The Journal of Economic Education, Taylor & Francis Journals, vol. 38(2), pages 131-142, April.
    8. Paul W. Grimes, 2002. "The Overconfident Principles of Economics Student: An Examination of a Metacognitive Skill," The Journal of Economic Education, Taylor & Francis Journals, vol. 33(1), pages 15-30, January.
    9. Marian Krajc, 2008. "Are the Unskilled Really That Unaware? Understanding Seemingly Biased Self-Assessments," CERGE-EI Working Papers wp373, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    10. Dan Lovallo & Colin Camerer, 1999. "Overconfidence and Excess Entry: An Experimental Approach," American Economic Review, American Economic Association, vol. 89(1), pages 306-318, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martinez, Gabriel X., 2023. "Studying like a nerd: Spacing, self-testing, and explanatory questioning in principles of microeconomics," International Review of Economics Education, Elsevier, vol. 44(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brookins, Philip & Lucas, Adriana & Ryvkin, Dmitry, 2014. "Reducing within-group overconfidence through group identity and between-group confidence judgments," Journal of Economic Psychology, Elsevier, vol. 44(C), pages 1-12.
    2. Sandra Ludwig & Julia Nafziger, 2011. "Beliefs about overconfidence," Theory and Decision, Springer, vol. 70(4), pages 475-500, April.
    3. Jonathan F Schulz & Christian Thöni, 2016. "Overconfidence and Career Choice," PLOS ONE, Public Library of Science, vol. 11(1), pages 1-8, January.
    4. Huang, Ronghong & Tan, Kelvin Jui Keng & Faff, Robert W., 2016. "CEO overconfidence and corporate debt maturity," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 93-110.
    5. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    6. Joon Mahn Lee & Jung Chul Park & Guoli Chen, 2023. "A cognitive perspective on real options investment: CEO overconfidence," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 1084-1110, April.
    7. Ryvkin, Dmitry & Krajč, Marian & Ortmann, Andreas, 2012. "Are the unskilled doomed to remain unaware?," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 1012-1031.
    8. Wu, Meng-Wen & Xu, Li & Shen, Chung-hua & Zhang, Ke-Kun, 2021. "Overconfident CEOs and shadow banking in China," Pacific-Basin Finance Journal, Elsevier, vol. 65(C).
    9. Michael Muthukrishna & Joseph Henrich & Wataru Toyokawa & Takeshi Hamamura & Tatsuya Kameda & Steven J Heine, 2018. "Overconfidence is universal? Elicitation of Genuine Overconfidence (EGO) procedure reveals systematic differences across domain, task knowledge, and incentives in four populations," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-30, August.
    10. Feld, Jan & Sauermann, Jan & de Grip, Andries, 2017. "Estimating the relationship between skill and overconfidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 18-24.
    11. Zachary Breig & Matthew Gibson & Jeffrey Shrader, 2019. "Why Do We Procrastinate? Present Bias and Optimism," Department of Economics Working Papers 2019-15, Department of Economics, Williams College.
    12. Otto, Clemens A., 2014. "CEO optimism and incentive compensation," Journal of Financial Economics, Elsevier, vol. 114(2), pages 366-404.
    13. Helen X. H. Bao & Steven Haotong Li, 2016. "Overconfidence And Real Estate Research: A Survey Of The Literature," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-24, September.
    14. Persson, Lars & Seiler, Thomas, 2022. "Entrepreneurial optimism and creative destruction," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    15. Johannes Brunzel, 2021. "Overconfidence and narcissism among the upper echelons: a systematic literature review," Management Review Quarterly, Springer, vol. 71(3), pages 585-623, July.
    16. Danz, David, 2020. "Never underestimate your opponent: Hindsight bias causes overplacement and overentry into competition," Games and Economic Behavior, Elsevier, vol. 124(C), pages 588-603.
    17. Duersch, Peter & Lambrecht, Marco & Oechssler, Joerg, 2020. "Measuring skill and chance in games," European Economic Review, Elsevier, vol. 127(C).
    18. Baiba Renerte & Jan Hausfeld & Torsten Twardawski, 2020. "Gender, overconfidence, and optimal group composition for investment decisions," TWI Research Paper Series 121, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    19. Lai, Yi-Hsun & Tai, Vivian W., 2019. "Managerial overconfidence and directors' and officers' liability insurance," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    20. De Paola, Maria & Gioia, Francesca & Scoppa, Vincenzo, 2014. "Overconfidence, omens and gender heterogeneity: Results from a field experiment," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 237-252.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ireced:v:36:y:2021:i:c:s1477388020300359. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/international-review-of-economics-education .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.