IDEAS home Printed from https://ideas.repec.org/a/eee/jobhdp/v113y2010i1p62-72.html
   My bibliography  Save this article

Testing four explanations for the better/worse-than-average effect: Single- and multi-item entities as comparison targets and referents

Author

Listed:
  • Suls, Jerry
  • Chambers, John
  • Krizan, Zlatan
  • Mortensen, Chad R.
  • Koestner, Bryan
  • Bruchmann, Kathryn

Abstract

In six experiments, we tested four explanations for the better/worse-than-average effect (B/WTA) by manipulating the number of items comprising the target or referent of direct comparison. A single-item target tended to be rated more extremely than a single-item or a multi-item referent (Experiments 1-3). No B/WTA was obtained, however, when a multi-item target was compared with either a single- or multi-item referent (Experiments 4 and 5). A bias favoring a multi-item target was found only if cohesiveness among the items was increased through instructions (Experiment 6). The Unique-Attributes Hypothesis generally provided the best explanation the findings; the focalism explanation also demonstrated some empirical viability. The results suggest that important preferential decision-making outcomes can be affected by both the number of items and whether items are strategically manipulated to serve as targets or referents of comparison.

Suggested Citation

  • Suls, Jerry & Chambers, John & Krizan, Zlatan & Mortensen, Chad R. & Koestner, Bryan & Bruchmann, Kathryn, 2010. "Testing four explanations for the better/worse-than-average effect: Single- and multi-item entities as comparison targets and referents," Organizational Behavior and Human Decision Processes, Elsevier, vol. 113(1), pages 62-72, September.
    • Handle: RePEc:eee:jobhdp:v:113:y:2010:i:1:p:62-72
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0749-5978(10)00038-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    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. Ulrike Malmendier & Geoffrey Tate, 2005. "CEO Overconfidence and Corporate Investment," Journal of Finance, American Finance Association, vol. 60(6), pages 2661-2700, December.
    2. Klar, Yechiel & Medding, Aviva & Sarel, Dan, 1996. "Nonunique Invulnerability: Singular versus Distributional Probabilities and Unrealistic Optimism in Comparative Risk Judgments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 67(2), pages 229-245, August.
    3. Moore, Don A., 2007. "Not so above average after all: When people believe they are worse than average and its implications for theories of bias in social comparison," Organizational Behavior and Human Decision Processes, Elsevier, vol. 102(1), pages 42-58, January.
    Full references (including those not matched with items on IDEAS)

    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. Moore, Don A. & Cain, Daylian M., 2007. "Overconfidence and underconfidence: When and why people underestimate (and overestimate) the competition," Organizational Behavior and Human Decision Processes, Elsevier, vol. 103(2), pages 197-213, July.
    2. repec:cup:judgdm:v:17:y:2022:i:2:p:449-486 is not listed on IDEAS
    3. Oliver Gloede & Lukas Menkhoff, 2014. "Financial Professionals' Overconfidence: Is It Experience, Function, or Attitude?," European Financial Management, European Financial Management Association, vol. 20(2), pages 236-269, March.
    4. Robert Libby & Kristina Rennekamp, 2012. "Self‐Serving Attribution Bias, Overconfidence, and the Issuance of Management Forecasts," Journal of Accounting Research, Wiley Blackwell, vol. 50(1), pages 197-231, March.
    5. Don A. Moore, 2007. "When good = better than average," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 2, pages 277-291, October.
    6. Benoît, Jean-Pierre & Dubra, Juan, 2007. "Overconfidence?," MPRA Paper 6017, University Library of Munich, Germany, revised Nov 2007.
    7. Hestermann, Nina & Le Yaouanq, Yves, 2018. "It\'s not my Fault! Self-Confidence and Experimentation," Rationality and Competition Discussion Paper Series 124, CRC TRR 190 Rationality and Competition.
    8. Jean‐Pierre Benoît & Juan Dubra, 2011. "Apparent Overconfidence," Econometrica, Econometric Society, vol. 79(5), pages 1591-1625, September.
    9. repec:cup:judgdm:v:2:y:2007:i::p:277-291 is not listed on IDEAS
    10. Brown, Jason L. & Farrington, Sukari & Sprinkle, Geoffrey B., 2016. "Biased self-assessments, feedback, and employees' compensation plan choices," Accounting, Organizations and Society, Elsevier, vol. 54(C), pages 45-59.
    11. Dasgupta, Dyotona & Saha, Anuradha, 2022. "Perceptions, biases, and inequality," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 198-210.
    12. Fast, Nathanael J. & Sivanathan, Niro & Mayer, Nicole D. & Galinsky, Adam D., 2012. "Power and overconfident decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 117(2), pages 249-260.
    13. Kennedy, Jessica A. & Anderson, Cameron & Moore, Don A., 2013. "When overconfidence is revealed to others: Testing the status-enhancement theory of overconfidence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 122(2), pages 266-279.
    14. Max Korbmacher & Ching (Isabelle) Kwan & Gilad Feldman, 2022. "Both better and worse than others depending on difficulty: Replication and extensions of Kruger’s (1999) above and below average effects," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 17(2), pages 449-486, March.
    15. Moore, Don A., 2007. "Not so above average after all: When people believe they are worse than average and its implications for theories of bias in social comparison," Organizational Behavior and Human Decision Processes, Elsevier, vol. 102(1), pages 42-58, January.
    16. Chhatwani, Malvika & Parija, Arpit Kumar, 2023. "Who invests in cryptocurrency? The role of overconfidence among American investors," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    17. Bobba, Matteo & Frisancho, Veronica, 2022. "Self-perceptions about academic achievement: Evidence from Mexico City," Journal of Econometrics, Elsevier, vol. 231(1), pages 58-73.
    18. Cardak, Buly A. & Martin, Vance L., 2023. "Household willingness to take financial risk: Stockmarket movements and life‐cycle effects," Journal of Banking & Finance, Elsevier, vol. 149(C).
    19. Alexandridis, G. & Antypas, N. & Travlos, N., 2017. "Value creation from M&As: New evidence," Journal of Corporate Finance, Elsevier, vol. 45(C), pages 632-650.
    20. Leon Zolotoy & Don O’Sullivan & Keke Song, 2021. "The Role of Ethical Standards in the Relationship Between Religious Social Norms and M&A Announcement Returns," Journal of Business Ethics, Springer, vol. 170(4), pages 721-742, May.
    21. Sandra Ludwig & Julia Nafziger, 2011. "Beliefs about overconfidence," Theory and Decision, Springer, vol. 70(4), pages 475-500, April.
    22. Prokudina, Elena & Renneboog, Luc & Tobler, Philippe, 2015. "Does Confidence Predict Out-of-Domain Effort?," Discussion Paper 2015-055, Tilburg University, Center for Economic Research.

    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:jobhdp:v:113:y:2010:i:1:p:62-72. 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.elsevier.com/locate/obhdp .

    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.