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Overconfidence is universal? Elicitation of Genuine Overconfidence (EGO) procedure reveals systematic differences across domain, task knowledge, and incentives in four populations

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  • Michael Muthukrishna
  • Joseph Henrich
  • Wataru Toyokawa
  • Takeshi Hamamura
  • Tatsuya Kameda
  • Steven J Heine

Abstract

Overconfidence is sometimes assumed to be a human universal, but there remains a dearth of data systematically measuring overconfidence across populations and contexts. Moreover, cross-cultural experiments often fail to distinguish between placement and precision and worse still, often compare population-mean placement estimates rather than individual performance subtracted from placement. Here we introduce a procedure for concurrently capturing both placement and precision at an individual level based on individual performance: The Elicitation of Genuine Overconfidence (EGO) procedure. We conducted experiments using the EGO procedure, manipulating domain, task knowledge, and incentives across four populations—Japanese, Hong Kong Chinese, Euro Canadians, and East Asian Canadians. We find that previous measures of population-level overconfidence may have been misleading; rather than universal, overconfidence is highly context dependent. Our results reveal cross-cultural differences in sensitivity to incentives and differences in overconfidence strategies, with underconfidence, accuracy, and overconfidence. Comparing sexes, we find inconsistent results for overplacement, but that males are consistently more confident in their placement. These findings have implications for our understanding of the adaptive value of overconfidence and its role in explaining population-level and individual-level differences in economic and psychological behavior.

Suggested Citation

  • 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.
    • Handle: RePEc:plo:pone00:0202288
    DOI: 10.1371/journal.pone.0202288
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    References listed on IDEAS

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    Cited by:

    1. Ifcher, John & Zarghamee, Homa, 2020. "Competitive Preferences among Asians in the U.S," IZA Discussion Papers 13913, Institute of Labor Economics (IZA).
    2. Donald F. Kuratko & Greg Fisher & David B. Audretsch, 2021. "Unraveling the entrepreneurial mindset," Small Business Economics, Springer, vol. 57(4), pages 1681-1691, December.
    3. Shanglyu Deng & Hanming Fang & Qiang Fu & Zenan Wu, 2020. "Confidence Management in Tournaments," NBER Working Papers 27186, National Bureau of Economic Research, Inc.
    4. Lawrence, Edward R. & Nguyen, Thanh D. & Wick, Benedikt, 2024. "Gender difference in overconfidence and household financial literacy," Journal of Banking & Finance, Elsevier, vol. 166(C).
    5. Brañas-Garza, Pablo & Mesa-Vázquez, Ernesto & Rivero-Garrido, Noelia, 2020. "Gender differences in overplacement in familiar and unfamiliar tasks: Far more similarities," MPRA Paper 104426, University Library of Munich, Germany.
    6. Shanglyu Deng & Hanming Fang & Qiang Fu & Zenan Wu, 2020. "Confidence Management in Tournaments," NBER Working Papers 27186, National Bureau of Economic Research, Inc.
    7. László Szerb & Zsófia Vörös, 2021. "The changing form of overconfidence and its effect on growth expectations at the early stages of startups," Small Business Economics, Springer, vol. 57(1), pages 151-165, June.

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