Effects of amount of information on judgment accuracy and confidence

  • Claire I. Tsai, Joshua Klayman, Reid Hastie
  • A version of the paper can be found here.
  • Want a summary of academic papers with alpha? Check out our free Academic Alpha Database!

Abstract:

When a person evaluates his or her confidence in a judgment, what is the effect of receiving more judgment-relevant information? We report three studies that show when judges receive more information, their confidence increases more than their accuracy, producing substantial confidence–accuracy discrepancies. Our results suggest that judges do not adjust for the cognitive limitations that reduce their ability to use additional information effectively. We place these findings in a more general framework of understanding the cues to confidence that judges use and how those cues relate to accuracy and calibration.

Data Sources:

Survey Evidence

Alpha Highlight:

Empiritrage has a detailed report here

confidence

The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

 

Print Friendly, PDF & Email