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The Overconfident Principles of Economics Student: An Examination of a Metacognitive Skill

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  • Paul W. Grimes

Abstract

Students in a large principles of macroeconomics class were asked to predict their performance on a regularly scheduled midterm examination. The author collected and analyzed data to examine the effect of various demographic characteristics, academic endowments, course preparation, and course performance variables on the accuracy of pretest expectations. A two-equation recursive model was estimated by the author to determine which factors influenced the accuracy of student expectations (predictive calibration). The results indicated that a pervasive degree of overconfidence existed within the sample. Although age and overall academic performance were found to temper overconfidence, students with credit in a previous economics course had a greater probability of reporting overconfident expectations. Overconfidence was found to be associated with lower degrees of predictive calibration. Misjudgments concerning the scope of the midterm were found to lower predictive calibration scores, ceteris paribus . These and other results indicate that unmet student performance expectations may be a root cause for the routinely observed student dissatisfaction within the traditional principles course.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:jeduce:v:33:y:2002:i:1:p:15-30
    DOI: 10.1080/00220480209596121
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    Cited by:

    1. Kai Hao Yang & Alexander K. Zentefis, 2023. "Extreme Points of First-Order Stochastic Dominance Intervals: Theory and Applications," Cowles Foundation Discussion Papers 2355, Cowles Foundation for Research in Economics, Yale University.
    2. Darren Grant & William Green, 2013. "Grades as incentives," Empirical Economics, Springer, vol. 44(3), pages 1563-1592, June.
    3. Arnold, Ivo J.M., 2020. "Gender and major choice within economics: Evidence from Europe," International Review of Economics Education, Elsevier, vol. 35(C).
    4. Castellani, Marco & Di Giovinazzo, Viviana & Novarese, Marco, 2010. "Procedural rationality and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(3), pages 376-383, June.
    5. Page, Lionel, 2009. "Is there an optimistic bias on betting markets?," Economics Letters, Elsevier, vol. 102(2), pages 70-72, February.
    6. Belayet Hossain & Panagiotis Tsigaris, 2015. "Are grade expectations rational? A classroom experiment," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 199-212, April.
    7. 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).
    8. Gerardo Sabater-Grande & Nikolaos Georgantzís & Noemí Herranz-Zarzoso, 2023. "Goals and guesses as reference points: a field experiment on student performance," Theory and Decision, Springer, vol. 94(2), pages 249-274, February.
    9. Kader,, Ahmad A, 2022. "Locus of control, self-efficacy, and student performance in an introductory economics course," International Review of Economics Education, Elsevier, vol. 39(C).
    10. Gerardo Sabater-Grande & Noemí Herranz-Zarzoso & Aurora García-Gallego, 2024. "The role of monetary incentives and feedback on how well students calibrate their academic performance," Working Papers 2024/01, Economics Department, Universitat Jaume I, Castellón (Spain).
    11. Marcia L. Zindel & Emilio Menezes & Raul Matsushita & Sergio Da Silva, 2010. "Biological characteristics modulating investor overconfidence," Economics Bulletin, AccessEcon, vol. 30(2), pages 1496-1508.
    12. Jan R. Magnus & Anatoly A. Peresetsky, 2017. "Grade Expectations: Rationality and Overconfidence," Tinbergen Institute Discussion Papers 17-054/III, Tinbergen Institute.
    13. Kader, Ahmad A., 2016. "Debilitating and facilitating test anxiety and student motivation and achievement in principles of microeconomics," International Review of Economics Education, Elsevier, vol. 23(C), pages 40-46.
    14. Calvin Blackwell, 2010. "Rational Expectations in the Classroom: A Learning Activity," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 10(2), pages 1-6, Fall.
    15. Dennis Caplan & Kristian G. Mortenson & Marisa Lester, 2018. "Can incentives mitigate student overconfidence at grade forecasts?," Accounting Education, Taylor & Francis Journals, vol. 27(1), pages 27-47, January.
    16. Dirk S. Yandell, 2017. "Grade Expectations and Overconfidence: Is Economics Different?," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 17(2), pages 18-28, Fall.
    17. Kai Hao Yang & Alexander K. Zentefis, 2023. "Monotone Function Intervals: Theory and Applications," Papers 2302.03135, arXiv.org, revised Apr 2024.
    18. Mark Maier & Scott Simkins, 2011. "Lessons from Physics Education Research: Lessons for Economics Education," Chapters, in: Gail M. Hoyt & KimMarie McGoldrick (ed.), International Handbook on Teaching and Learning Economics, chapter 36, Edward Elgar Publishing.
    19. 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).
    20. Willis, Veronda F., 2016. "A model for teaching technology: Using Excel in an accounting information systems course," Journal of Accounting Education, Elsevier, vol. 36(C), pages 87-99.
    21. Lionel Page, 2010. "Experimental Economics method to study pupils motivation," Revue d'économie politique, Dalloz, vol. 120(5), pages 779-792.
    22. Guest, Jon & Riegler, Robert, 2017. "Learning by doing: Do economics students self-evaluation skills improve?," International Review of Economics Education, Elsevier, vol. 24(C), pages 50-64.
    23. Hermansson, Cecilia & Jonsson, Sara, 2020. "Managing one's personal finances: Are women more overconfident than men?," Working Paper Series 20/1, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.

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