IDEAS home Printed from https://ideas.repec.org/a/eee/jobhdp/v161y2020icp201-212.html
   My bibliography  Save this article

Confidence and the description–experience distinction

Author

Listed:
  • Lejarraga, Tomás
  • Lejarraga, José

Abstract

In this paper, we extend the literature on the description–experience gap in risky choices by focusing on how the mode of learning—through description or experience—affects confidence. Specifically, we explore how learning through description or experience affects confidence in (1) the information gathered to make a decision and (2) the resulting choice. In two preregistered experiments we tested whether there was a description–experience gap in both dimensions of confidence. Learning from description was associated with higher confidence—both in the information gathered and in the choice made—than was learning from experience. In a third preregistered experiment, we examined the effect of sample size on confidence in decisions from experience. Contrary to the normative view that larger samples foster confidence in statistical inference, we observed that more experience led to less confidence. This observation is reminiscent of recent theories of deliberate ignorance, which highlight the adaptive benefits of deliberately limiting information search.

Suggested Citation

  • Lejarraga, Tomás & Lejarraga, José, 2020. "Confidence and the description–experience distinction," Organizational Behavior and Human Decision Processes, Elsevier, vol. 161(C), pages 201-212.
  • Handle: RePEc:eee:jobhdp:v:161:y:2020:i:c:p:201-212
    DOI: 10.1016/j.obhdp.2020.07.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S074959782030368X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.obhdp.2020.07.003?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. Muriel Niederle & Lise Vesterlund, 2011. "Gender and Competition," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 601-630, September.
    2. Frances Westley & Henry Mintzberg, 1989. "Visionary leadership and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 10(S1), pages 17-32, June.
    3. Lejarraga, Tomás & Gonzalez, Cleotilde, 2011. "Effects of feedback and complexity on repeated decisions from description," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(2), pages 286-295.
    4. Christine Kaufmann & Martin Weber & Emily Haisley, 2013. "The Role of Experience Sampling and Graphical Displays on One's Investment Risk Appetite," Management Science, INFORMS, vol. 59(2), pages 323-340, July.
    5. Tomás Lejarraga & Johannes Müller-Trede, 2017. "When Experience Meets Description: How Dyads Integrate Experiential and Descriptive Information in Risky Decisions," Management Science, INFORMS, vol. 63(6), pages 1953-1971, June.
    6. Broihanne, M.H. & Merli, M. & Roger, P., 2014. "Overconfidence, risk perception and the risk-taking behavior of finance professionals," Finance Research Letters, Elsevier, vol. 11(2), pages 64-73.
    7. Trafimow, David & Sniezek, Janet A., 1994. "Perceived Expertise and Its Effect on Confidence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 57(2), pages 290-302, February.
    8. Brown, Graham & Baer, Markus, 2011. "Location in negotiation: Is there a home field advantage?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 114(2), pages 190-200, March.
    9. Joaquin Navajas & Chandni Hindocha & Hebah Foda & Mehdi Keramati & Peter E. Latham & Bahador Bahrami, 2017. "The idiosyncratic nature of confidence," Nature Human Behaviour, Nature, vol. 1(11), pages 810-818, November.
    10. Ido Erev & Ira Glozman & Ralph Hertwig, 2008. "What impacts the impact of rare events," Journal of Risk and Uncertainty, Springer, vol. 36(2), pages 153-177, April.
    11. Dan Bang & Laurence Aitchison & Rani Moran & Santiago Herce Castanon & Banafsheh Rafiee & Ali Mahmoodi & Jennifer Y. F. Lau & Peter E. Latham & Bahador Bahrami & Christopher Summerfield, 2017. "Confidence matching in group decision-making," Nature Human Behaviour, Nature, vol. 1(6), pages 1-7, June.
    12. Camilleri, Adrian R. & Newell, Ben R., 2019. "Better calibration when predicting from experience (rather than description)," Organizational Behavior and Human Decision Processes, Elsevier, vol. 150(C), pages 62-82.
    13. Niklas Karlsson & George Loewenstein & Duane Seppi, 2009. "The ostrich effect: Selective attention to information," Journal of Risk and Uncertainty, Springer, vol. 38(2), pages 95-115, April.
    14. Joseph R. Radzevick & Don A. Moore, 2011. "Competing to Be Certain (But Wrong): Market Dynamics and Excessive Confidence in Judgment," Management Science, INFORMS, vol. 57(1), pages 93-106, 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. Camilleri, Adrian R. & Newell, Ben R., 2019. "Better calibration when predicting from experience (rather than description)," Organizational Behavior and Human Decision Processes, Elsevier, vol. 150(C), pages 62-82.
    2. Florent Meyniel, 2020. "Brain dynamics for confidence-weighted learning," PLOS Computational Biology, Public Library of Science, vol. 16(6), pages 1-27, June.
    3. repec:cup:judgdm:v:17:y:2022:i:5:p:1146-1175 is not listed on IDEAS
    4. repec:jdm:journl:v:17:y:2022:i:5:p:1146-1175 is not listed on IDEAS
    5. Pirinsky, Christo, 2013. "Confidence and economic attitudes," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 139-158.
    6. Eyal Ert & Stefan Trautmann, 2014. "Sampling experience reverses preferences for ambiguity," Journal of Risk and Uncertainty, Springer, vol. 49(1), pages 31-42, August.
    7. Christoph Buehren & Marvin Gabriel, 2021. "Performing best when it matters the most: Evidence from professional handball," MAGKS Papers on Economics 202119, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Davide Marchiori & Sibilla Di Guida & Ido Erev, 2013. "Noisy retrievers and the four-fold reaction to rare events," Working Papers 3, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    9. Bühren Christoph & Gabriel Marvin, 2023. "Performing best when it matters the most: evidence from professional handball," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 19(3), pages 185-203, September.
    10. Pindard-Lejarraga, Maud & Lejarraga, José, 2024. "Information source and entrepreneurial performance expectations: Experience-based versus description-based opportunity evaluations," Journal of Business Research, Elsevier, vol. 172(C).
    11. Hogarth, Robin M. & Soyer, Emre, 2015. "Communicating forecasts: The simplicity of simulated experience," Journal of Business Research, Elsevier, vol. 68(8), pages 1800-1809.
    12. 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).
    13. Francesco Capozza & Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2021. "Studying Information Acquisition in the Field: A Practical Guide and Review," CEBI working paper series 21-15, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    14. Ranganathan, Kavitha & Lejarraga, Tomás, 2021. "Elicitation of risk preferences through satisficing," Journal of Behavioral and Experimental Finance, Elsevier, vol. 32(C).
    15. Buser, Thomas & Ranehill, Eva & van Veldhuizen, Roel, 2021. "Gender differences in willingness to compete: The role of public observability," Journal of Economic Psychology, Elsevier, vol. 83(C).
    16. Kessel, Dany & Mollerstrom, Johanna & van Veldhuizen, Roel, 2021. "Can simple advice eliminate the gender gap in willingness to compete?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 138, pages 1-1.
    17. Fanny Landaud & Son Thierry Ly & Éric Maurin, 2020. "Competitive Schools and the Gender Gap in the Choice of Field of Study," Journal of Human Resources, University of Wisconsin Press, vol. 55(1), pages 278-308.
    18. Thomas Buser, 2016. "The Impact of Losing in a Competition on the Willingness to Seek Further Challenges," Management Science, INFORMS, vol. 62(12), pages 3439-3449, December.
    19. Carvajal, Daniel & Franco, Catalina & Isaksson, Siri, 2024. "Will Artificial Intelligence Get in the Way of Achieving Gender Equality?," Discussion Paper Series in Economics 3/2024, Norwegian School of Economics, Department of Economics, revised 05 Aug 2024.
    20. Oladipo, Oluwasheyi S. & Platt, Katarzyna & Shim, Hyoung Suk, 2020. "Managerial Performance of a Female-Owned and Home-Based Firm," IZA Discussion Papers 13981, Institute of Labor Economics (IZA).
    21. De Paola, Maria & Gioia, Francesca & Scoppa, Vincenzo, 2015. "Are females scared of competing with males? Results from a field experiment," Economics of Education Review, Elsevier, vol. 48(C), pages 117-128.
    22. Alessia Berni & Luigi Moschera, 2021. "Performance and Competences in Call Centre: The Effect of Leadership Style," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(10), pages 204-204, July.

    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:161:y:2020:i:c:p:201-212. 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.