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At the Crossroad of Research: The Impact of Projection Bias on the Decision to Explore or Exploit Ideas

Author

Listed:
  • Kohei Daido

    (Kwansei Gakuin University)

  • Tomoya Tajika

    (Nihon University)

Abstract

Focusing on projection bias and overconfidence/underconfidence, we demonstrate the effects of projection bias on the decision of a researcher to delve deeper into the current research idea or explore a new one in infinite periods. We consider a researcher who has a belief regarding whether other researchers have already come up with the same idea. Although beliefs dominated by overconfidence/underconfidence are consistent over time, beliefs dominated by projection bias are inconsistent, depending on whether the researcher has obtained a new idea. We show that a researcher with projection bias changes ideas more often than overconfident/underconfident researchers. Moreover, successful researchers are more likely to have projection bias when the required value of the research outcome for success is sufficiently high. Our results have implications for the file drawer problem, which is the tendency of researchers to shelve negative or insignificant results.

Suggested Citation

  • Kohei Daido & Tomoya Tajika, 2023. "At the Crossroad of Research: The Impact of Projection Bias on the Decision to Explore or Exploit Ideas," Discussion Paper Series 263, School of Economics, Kwansei Gakuin University.
  • Handle: RePEc:kgu:wpaper:263
    as

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    File URL: http://192.218.163.163/RePEc/pdf/kgdp263.pdf
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    References listed on IDEAS

    as
    1. Juan Dubra, 2004. "Optimism and Overconfidence in Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 198-218, January.
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    More about this item

    Keywords

    Projection bias; Over/underconfidence; Selectiveness; Explore or exploit ideas; File drawer problem;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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