Changes in the overconfidence effect after debiasing.

Abstract

The problem of the overconfidence bias is investigated. The possible reduction of students' overconfidence in their own predictions was investigated using two debiasing techniques: exposure to base rate and description of the problem. It was found that base rate exposure significantly reduced overconfidence while description of the problem had no effect. These findings are valuable for industry. Decisions regarding personnel selection and delegation of responsibility, for example, would be better made if the tendency to be overconfident is diminished by the use of base rate information. Costly mistakes can then be avoided.