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Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback

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  • King-King Li

    (Shenzhen University [Shenzhen])

Abstract

We experimentally investigate the memory recall bias of overconfident (underconfident) individuals after receiving feedback on their overconfidence (underconfidence). Our study differs from the literature by identifying the recall pattern conditional on subjects' overconfidence/underconfidence. We obtain the following results. First, overconfident (underconfident) subjects exhibit overconfident (underconfident) recall despite receiving feedback on their overconfidence (underconfidence). Second, awareness of one's overconfidence or underconfidence does not eliminate memory recall bias. Third, the primacy effect is stronger than the recency effect. Overall, our results suggest that memory recall bias is mainly due to motivated beliefs of sophisticated decision makers rather than naïve decision-making.

Suggested Citation

  • King-King Li, 2022. "Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback," Post-Print hal-03841235, HAL.
    • Handle: RePEc:hal:journl:hal-03841235
    DOI: 10.3390/g13030041
    Note: View the original document on HAL open archive server: https://audencia.hal.science/hal-03841235
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    References listed on IDEAS

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    Cited by:

    1. Li, King King & Rong, Kang, 2023. "Real-life investors’ memory recall bias: A lab-in-the-field experiment," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).

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    Keywords

    memory recall bias; overconfidence; underconfidence; experiment;
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