Illusion Versus Reality: An Empirical Study of Overconfidence and Self Attribution Bias in Business Management Students

Sharma, Vinky; Shakeel, Moonis

doi:10.1080/08832323.2015.1014458

Cited by 11 publications

(6 citation statements)

References 26 publications

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“…Perhaps the most notable claim has been that men overplace themselves more than women (Barber & Odean, ; Jonsson & Allwood, ; Niederle & Vesterlund, ; Pulford & Colman, ). But male overplacement is far from universal (Nekby, Thoursie, & Vahtrik, ; Sharma & Shakeel, ), and numerous studies fail to find gender differences (Acker & Duck, ; Deaves, Lüders, & Schröder, ; Mannes & Moore, ; Moore & Swift, ).…”

Section: Individual Differencesmentioning

confidence: 99%

The three faces of overconfidence

Moore

Schatz

2017

Social & Personality Psych

151

119

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Overconfidence has been studied in 3 distinct ways. Overestimation is thinking that you are better than you are. Overplacement is the exaggerated belief that you are better than others. Overprecision is the excessive faith that you know the truth. These 3 forms of overconfidence manifest themselves under different conditions, have different causes, and have widely varying consequences. It is a mistake to treat them as if they were the same or to assume that they have the same psychological origins. | INTRODUCTIONResearch on overconfidence employs a diversity of approaches and measures as if they all tap the same underlying psychological construct. This is an error. Overconfidence is not a single unitary construct. In this paper, we note the inconsistent results between different approaches to the study of overconfidence. These inconsistencies are further muddled by multiple usages of the term "overconfidence" in the vernacular. In the interests of clarity, we begin this review with a few definitions, beginning with the definition of overconfidence: greater confidence than reality justifies. Measuring overconfidence necessitates a comparison between beliefs and reality. We then consider each of the three types of overconfidence in turn: overestimation, overplacement, and overprecision. Given that overconfident beliefs are (by definition) incorrect, we then confront the question:Can overconfidence be useful? Finally, we consider one way in which researchers assume there is psychological coherence to overconfidence: stable individual differences. Here again, we will question the solidity of the phenomenon and argue that overconfidence does not appear to be a stable difference between people. Our review highlights the diversity and inconsistency in manifestations of overconfidence.There is a great deal of work on confidence, self-efficacy, self-esteem, optimism, and self-enhancement that includes no measure of overconfidence because there is no accuracy benchmark against which beliefs can be compared. The research that does compare beliefs with reality to assess overconfidence has usually employed one of three measures: overestimation, overplacement, or overprecision. Overestimation is thinking that you are better than you are. Donald Trump's claim to be worth $10 billion (White, 2016) represented an overestimate relative to a more credible estimate of $4.5 billion by Forbes magazine (Peterson-Withorn, 2016). A second measure of overconfidence is overplacement: the exaggerated belief that you are better than others. When Trump claimed to have achieved the largest electoral victory since Ronald Reagan (Cummings, 2017), he was overplacing himself relative to other presidents. A third form of overconfidence is overprecision: being too sure you know the truth. Trump displays overprecision when he claims certainty about views, which are contradicted by reality. . Does the better-than-average effect show that people are overconfident?: Two experiments.

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Section: Individual Differencesmentioning

confidence: 99%

The three faces of overconfidence

Moore

Schatz

2017

Social & Personality Psych

151

119

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“…Similarly, Mishra and Metilda (2015) show that overconfidence level is more pervasive in men than women. However, a study by Sharma and Shakeel (2015) on management students across gender finds no difference across gender with respect to overconfidence. In Malaysia, Lai et al (2013) examine the behaviour of retail and institutional investors during bull and bear markets, and find that both investors are overconfident during these periods; though these investors exercise self-control and are driven by liquidity when making investment decisions.…”

Section: Overconfidencementioning

confidence: 94%

Institutional investors vs retail investors

Jaiyeoba

Abdullah

Ibrahim

2019

IJBM

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Purpose Guided by several pioneered studies, the purpose of this paper is to comprehensively investigate the investment behaviours of Malaysian retail and institutional investors in an attempt to identify whether the influence of psychological biases is equally applicable to investor divides. Design/methodology/approach The researchers have adopted a quantitative research design by way of survey methodology to obtain data from institutional and retail investors in Malaysia. In addition, the authors have mainly employed second-order measurement invariance analysis to uncover the difference across investor divides. Findings The tests of measurement invariance at the model level indicate an insignificant difference between institutional investors and retail investors. The post hoc test (at the path level) reveals that institutional and retail investors are similar with respect to representative heuristic, overconfidence bias and anchoring bias; though the results also show that they are different with respect to religious bias and herding bias. Research limitations/implications Based on the findings of this study, it is generally not logical to assume that institutional investors completely behave rational during investment decisions. Besides, future researchers are called upon to directly compare the investment decisions of institutional and retail investors with respect to whether the influence of psychological biases is equally applicable to them, particularly on the investigated psychological biases and other psychological biases that are not covered in this study. Originality/value This study has offered insight into whether the influence of psychological biases is equally applicable to institutional and retail investors in Malaysia using second-order measurement invariance analysis. This study is unique in context and the approach it has adopted.

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“…Many educators have observed that students tend to overestimate their own grades. Psychologists have known that people generally, and students particularly, tend to overestimate their own abilities (Sharma and Shakeel, 2015). As a result, biases could affect students’ self-perceptions of their own skill levels.…”

Section: Literature Reviewmentioning

confidence: 99%

Am I ready to graduate? Management majors’ perceived collegiate skill development

Routon

Rawls

Bontrager

2023

Industry and Higher Education

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We examine 15 skills of graduating management majors as measured by self-rated perceptions of change during their college tenure. The sample includes 520,052 students from 697 higher education institutions in the United States. The research questions are: (1) As judged by management majors themselves, how much have their skills changed as a result of higher education? (2) How do these self-perceptions compare to other students? (3) What is the estimated impact of a management degree on these changes? Notable findings include that at least 90% of students reporting stronger, if not much stronger, skills in the categories of general knowledge, critical thinking, analytics, problem solving, and knowledge of their chosen field (management). However, other skills such as leadership are reported by 16% of management students as experiencing no change. The ratings of communication skills categories of public speaking and writing reported 17% of each category as no change or weaker skills is these areas. Study findings are discussed along with recommendations for future research.

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Illusion Versus Reality: An Empirical Study of Overconfidence and Self Attribution Bias in Business Management Students

Cited by 11 publications

References 26 publications

The three faces of overconfidence

The three faces of overconfidence

Institutional investors vs retail investors

Am I ready to graduate? Management majors’ perceived collegiate skill development

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