Overconfidence and Diversification
نویسندگان
چکیده
منابع مشابه
Overconfidence and diversification
Experimental evidence suggests that people tend to be overcon dent in the sense that they overestimate the accuracy of their private information. In this paper we show that risk-averse principals might prefer overcon dent agents in various strategic interactions because these agents help diversify the aggregate risk. This may help understanding why successful analysts and entrepreneurs tend to ...
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People self-assess their relative ability when making career choices. Thus, confidence in their own abilities is likely an important factor for selection into various career paths. In a sample of 711 first-year students we examine whether there are systematic differences in confidence levels across fields of study. We find that our experimental confidence measures significantly vary between fie...
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It is well known that when agents are fully rational, compulsory public insurance may make all agents better o¤ in the Rothschild and Stiglitz (1976) model of insurance markets. We nd that when su¢ ciently many agents underestimate their personal risks, compulsory insurance makes low-risk agents worse o¤. Hence, behavioral biases may weaken some of the well-established rationales for governmen...
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ژورنال
عنوان ژورنال: American Economic Journal: Microeconomics
سال: 2014
ISSN: 1945-7669,1945-7685
DOI: 10.1257/mic.6.1.134