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Self-Centered Beliefs: An Empirical Approach

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  • Proto, Eugenio
  • Sgroi, Daniel

Abstract

We perform an experiment designed to assess the accuracy of beliefs about distributions. The beliefs relate to behavior (mobile phone purchasing decisions, hypothetical restaurant choices), attitudes (happiness, politics) and observable characteristics (height, weight) and are typically formed through real world experiences. We find a powerful and ubiquitous bias in perceptions that is “self-centered” in the sense that an individual’s beliefs about the population distribution changes with their own position in the distribution. In particular, those at extremes tend to perceive themselves as closer to the middle of the distribution than is the case. We discuss possible explanations for this bias.

Suggested Citation

  • Proto, Eugenio & Sgroi, Daniel, 2012. "Self-Centered Beliefs: An Empirical Approach," Economic Research Papers 270746, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:270746
    DOI: 10.22004/ag.econ.270746
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. We all have self-centered beliefs about others
      by Economic Logician in Economic Logic on 2012-03-20 19:29:00

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    More about this item

    Keywords

    Financial Economics;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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