Inappropriate Confidence and Retirement Planning: Four Studies with a National Sample

Journal of Behavioral Decision Making

Volumn 25, Issue 4, 2012, Pages 382-389

  Parker, Andrew M ^a   de Bruin, Wändi Bruine ^b,c   Yoong, Joanne ^a   Willis, Robert ^d  

^a RAND CORPORATION   (United States)

^b CARNEGIE MELLON UNIVERSITY   (United States)

^c CARNEGIE MELLON UNIVERSITY   (United States)

^d UNIVERSITY OF MICHIGAN   (United States)

Author keywords

Competence; Confidence; Knowledge; Metacognition; Retirement

Indexed keywords

EID: 84864821636     PISSN: 08943257     EISSN: 10990771     Source Type: Journal    
DOI: 10.1002/bdm.745     Document Type: Article

References (41)

1. Alba, J. W., & Hutchinson, J. W. (2000). Knowledge calibration: What consumers know and what they think they know. Journal of Consumer Research, 27, 123-156.
2. Bandura, A. (1986). Social foundations of thought and action: A social cognitive theory. Englewood Cliffs, NJ: Prentice-Hall.
3. Bandura, A. (1997). Self-efficacy mechanism in human agency. The American Psychologist, 37, 122-147.
4. Barber, B. M., & Odean, T. (2000). Trading is hazardous for your wealth: The common stock investment performance of individual investors. The Journal of Finance, 55, 773-806.
5. Barber, B. M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. Quarterly Journal of Economics, 116, 261-292.
6. Ben-David, I., Graham, J. R., & Harvey, C. R. (2007). Managerial overconfidence and corporate policies. National Bureau of Economic Research Working Paper W13711.
7. Biais, B., Hilton, D., Mazurier, K., & Pouget, S. (2005). Judgmental overconfidence, self-monitoring, and trading performance in an experimental financial market. The Review of Economic Studies, 72, 287-312.
8. Blais, A.-R., Thompson, M. M., & Baranski, J. V. (2005). Individual differences in decision processing and confidence judgments in comparative judgment tasks: The role of cognitive styles. Personality and Individual Differences, 38, 1701-1713.
9. Bornstein, B. H., & Zickafoose, D. J. (1999). "I know it I know it, I saw it I saw it": The stability of the confidence-accuracy relationship across domains. Journal of Experimental Psychology: Applied, 5, 76-88.
10. Bruine de Bruin, W., Parker, A. M., & Fischhoff, B. (2007). Individual differences in adult decision-making competence. Journal of Personality and Social Psychology, 92, 938-956.
11. Camerer, C., & Lovallo, D. (1999). Overconfidence and excess entry: An experimental approach. The American Economic Review, 89, 306-318.
12. Crawford, J. D., & Stankov, L. (1996). Age differences in the realism of confidence judgments: A calibration study using tests of fluid and crystallized intelligence. Learning and Individual Differences, 8, 83-103.
13. Cronbach, L. J. (1951). Coefficient alpha and the internal structure of the tests. Psychometrika, 16, 297-334.
14. Dar, R., Rish, S., Hermesh, H., Taub, M., & Fux, M. (2000). Realism of confidence in obsessive-compulsive checkers. Journal of Abnormal Psychology, 109(4), 673-678.
15. Delavande, A., Rohwedder, S., & Willis, R. (2008, September). Preparation for retirement, financial literacy, and cognitive resources. University of Michigan Retirement Research Center Working Paper 2008-190.
16. Dominitz, J., Hung, A. A., & Yoong, J. (2009). How do mutual fund fees affect investor choices? Evidence from survey experiments. RAND Working Paper WR-653.
17. Goodie, A. (2005). The role of perceived control and overconfidence in pathological gambling. Journal of Gambling Studies, 21(4), 481-502.
18. Jaccard, J., Dodge, T., & Guilamo-Ramos, V. (2005). Metacognition, risk behavior, and risk outcomes: The role of perceived intelligence and perceived knowledge. Health Psychology, 24, 161-170.
19. Kimball, M. (2008, September). Cognition and financial literacy. Willis, R. Presentation at the Conference on Understanding Economic Decision-Making, Jackson Hole, WY.
20. Klayman, J., Soll, J., González-Vallejo, C., & Barlas, S. (1999). Overconfidence: It depends on how, what, and whom you ask. Organizational Behavior and Human Decision Processes, 79(3), 216-247.
21. Lusardi, A., & Mitchell, O. S. (2007). Financial literacy and retirement planning: New evidence from the RAND American Life Panel. MMRC Working Paper 2007-157.
22. Lusardi, A., & Mitchell, O. S. (2009). How ordinary consumers make complex economic decisions: Financial literacy and retirement readiness. National Bureau of Economic Research Working Paper 15350.
23. March, J. G., & Shapira, Z. (1987). Managerial perspectives on risk and risk taking. Management Science, 33, 1404-1418.
24. Moore, D. A., & Healy, P. J. (2008). The trouble with overconfidence. Psychological Review, 115, 502-517.
25. Moore, D. A., Kurtzberg, T. R., Fox, C. R., & Bazerman, M. H. (1999). Positive illusions and forecasting errors in mutual fund investment decisions. Organizational Behavior and Human Decision Processes, 79, 95-114.
26. Odean, T. (1999). Do investors trade too much? The American Economic Review, 89, 1279-1298.
27. Park, C. W., Mothersbaugh, D. L., & Feick, L. (1994). Consumer knowledge assessment. Journal of Consumer Research, 21, 71-82.
28. Parker, A. M., & Fischhoff, B. (2005). Decision-making competence: External validation through an individual-differences approach. Journal of Behavioral Decision Making, 18, 1-27.
29. Parker, A. M., & Stone, E. R. (2010). Identifying the effects of unjustified confidence versus overconfidence: Lessons learned from two analytic methods. RAND Working Paper (WR-740): http://www.rand.org/pubs/working_papers/WR740.html.
30. Price, P., & Stone, E. (2004). Intuitive evaluation of likelihood judgment producers: Evidence for a confidence heuristic. Journal of Behavioral Decision Making, 17(1), 39-57.
31. Sieck, W. R., & Arkes, H. R. (2005). The recalcitrance of overconfidence and its contribution to decision aid neglect. Journal of Behavioral Decision Making, 18, 29-53.
32. Stankov, L. (1998). Calibration curves, scatterplots and the distinction between general knowledge and perceptual tasks. Learning and Individual Differences, 10(1), 29-50.
33. Stankov, L., & Crawford, J. (1996). Confidence judgments in studies of individual differences. Personality and Individual Differences, 21(6), 971-986.
34. Stankov, L., & Crawford, J. D. (1997). Self-confidence and performance on tests of cognitive abilities. Intelligence, 25, 93-109.
35. Stanovich, K. E., & West, R. F. (2000). Individual differences in reasoning: Implications for the rationality debate? The Behavioral and Brain Sciences, 23, 645-726.
36. Statman, M., Thorley, S., & Vorkink, R. (2006). Investor overconfidence and trading volume. Review of Financial Studies, 19, 1531-1565.
37. Stone, E. R., Rittmayer, A., & Parker, A. M. (2004, November). Exploring the effects of overconfidence in casino blackjack. Poster presented at the Annual Meeting of the Society for Judgment and Decision Making, Minneapolis, MN.
38. West, R., & Stanovich, K. (1997). The domain specificity and generality of overconfidence: Individual differences in performance estimation bias. Psychonomic Bulletin & Review, 4(3), 387-392.
39. Willis, R. (2008, September). Overview of the cognitive economics survey. Presentation at the Conference on Understanding Economic Decision-Making, Jackson Hole, WY.
40. Wolfe, R., & Grosch, J. (1990). Personality correlates of confidence in one's decisions. Journal of Personality, 58(3), 515-534.
41. Yates, J. F. (1990). Judgment and decision making. Englewood Cliffs, NJ: Prentice Hall.