Irrational and Overrated

Irrational and Overrated

Is Our Unrealistic Self-Perception Connected to Educational Achievements?

eBook - 2014
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tested students is by far not as large as in the above mentioned research, age difference is considered as a minor determinant in this paper.   Biographische Informationen Dominik M. Piehlmaier worked more than four years for one of the biggest companies among the Fortune 500 before he dedicated himself to the studies which resulted in this book. He worked 1.5 years in the People's Republic of China first, in the project management and later, as an English teacher. The author is constantly participating in relevant congresses, and took part in an academic exchange program at Peking University and Fudan University. He currently lives in Santiago de Chile, and studies psychology and economics at Universidad del Desarrollo. His main intention is the research of irrational behavior and its impact on the business related decision-making process.
limits of ist knowledge. Kovalchik et al. (2005) followed this argumentation. In their study, they formed two groups with 51 junior college students and 50 highly educated, neurologically healthy seniors aged from 70 to 95. The authors tested their confidence level by giving each subject a questionnaire with 20 trivia questions. All questions had two possible answers. Participants were instructed to select an answer and then provide a confidence assessment of their choice. The lowest possible assessment was 50% rising in increments of tens up to 100. The older group did slightly better on the test and showed a lower level of overconfidence. This suggests that age has a positive impact on self-evaluation. Hershey and Wilson (1997) tested 28 undergraduate students and 32 university alumni with an average age of 71.1 years. About half of each group's participants were trained, the other half untrained. The scholars created subgroups and examined their behavior on six questions concerning financial planning for retirement. After completing these problems, subjects had to rate the quality of their answers on a Likert-scale ranging from 1 (very poor solution) to 7 (very good solution). The findings revealed that 'the absolute magnitude of errors made by older participants were equivalent to those made by younger ones". A clear connection between age and overconfidence was not visible. Crawford and Stankov (1996) drew a reversed picture. They stated that 'older subjects showed a consistent tendency towards greater overconfidence compared to younger subjects". This shows that, so far, scholars have not been able to prove a significant correlation between age and confidence level which might be representative for the whole population. The connection remains task-dependent and inconsistent. Due to these aspects and the fact that the age difference among the
avoid a misinterpretation of the final results caused by the factor itself. 4.1.1, Gender: The overestimation of one's own abilities is part of human nature but, on average, men are more affected than women. Barber and Odean (2001) showed that male investors trade more than their female counterparts and by doing so, they adversely affect their performance. Barber and Odean stated that a rational investor only trades if the expected return exceeds the costs of the transaction, such as taxes and commission. An overconfident trader overestimates the accuracy of his information and thereby the expected return. The authors said that people may even trade when the true expected net gain does not result in breaking even. However, the gender difference is not universal; it depends on the task. Lundeberg et al. (1994) said that the gap between the male and female confidence level is bigger in typically masculine areas. The finance industry is one area where men are disproportionally represented. The specific domains are also known for their lack of clear and immediate feedback, which therefore also increases overconfidence. Whenever unambiguous feedback is available without delay, the gender differences disappear (Barber and Odean, 2001). This research contains no masculine tasks. The pseudo common knowledge questions do not favor a specific gender. They are equally hard to answer for both male and female students. The analysis contains different groups, also for men and women, and all subjects received immediate feedback after the test. The detection of a gender difference is discussed in chapter 5. 4.1.2, Age: Common sense says that older people are better in judging their estimations. They have a sound metaknowledge after a lifetime of decision making in various forms and situations. This social group knows what it does not know and therefore knows the
This book examines the relationship between education and excessive confidence in situations of uncertainty. For this purpose, a questionnaire with 10 pseudo general knowledge questions was designed whereby their degree of difficulty exceeds the knowledge of an average student by far. It was investigated whether subjects (N = 535) would acknowledge this condition and its associated nescience. If that is the case, they will answer the 10 questions within an extremely wide confidence interval in order to meet the predefined 90% accuracy requirement. The focus of investigation was in Southern Germany as the school system regularly receives top marks in national educational rankings. In addition to the empirical study, the paper defines the distortion of judgment and identifies its relevant factors. It gives a detailed explanation of the German education system, and states the criticism of the concept of overconfidence. The paper concludes with a recommendation for action and ventures a look ahead. The main intention of the study is to identify a possible factor which influences human behavior towards a biased decision-making process. It is crucial to understand all relevant factors in order to take actions against the negative effects of overconfidence.   Auszug aus dem Text Text sample: Chapter 4.1, Confounders of Overconfidence: It is due to the complexity of the human cognitive system that a bias does not occur at the same intensity in every single person. There are various determinants that can influence overconfidence. This section contains the five most important factors and describes them as confounders to the heuristic. They can have a positive and negative impact on a person's confidence level. Furthermore, they bias the outcome of a statistical calculation in one particular direction. For each subitem there will be an explanation of how to
Publisher: Hamburg : Diplomica Verlag, 2014
Edition: 1st ed
Copyright Date: ©2014
ISBN: 9783954895755
Branch Call Number: Electronic book
Characteristics: 1 online resource (53 pages)
Additional Contributors: ProQuest (Firm)


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