Does the Better-than-Average Effect Show that People are Overconfident?: An Experiment

Benoı̂t, Jean-Pierre; Dubra, Juan

doi:10.2139/ssrn.1337733

Cited by 6 publications

(4 citation statements)

References 45 publications

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“…Recently, this has been called into question. Benoît et al () show that any fraction could rank themselves as better than average without any overconfident behaviour. Our preferred BTA‐measure of overconfidence accounts for this by adjusting the self‐rating measure of overconfidence for the true performance.…”

Section: Datamentioning

confidence: 99%

Financial Professionals' Overconfidence: Is It Experience, Function, or Attitude?

Gloede

Menkhoff

2011

Euro Fin Management

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This paper examines financial professionals' overconfidence in their forecasting performance. We compare individuals' self-rating of performance with the true performance, both measured relative to the same peer group. The forecasters in our sample show overconfidence on average, although to a moderate degree, including many cases of underconfidence. In analysing this, we find that working experience is accompanied by less overconfidence. Function is also related to less overconfidence, such as being a fund manager and using fundamental analysis. The same effect is found for the attitude to herd, whereas recent success appears with more overconfident professionals.

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Section: Datamentioning

confidence: 99%

Financial Professionals' Overconfidence: Is It Experience, Function, or Attitude?

Gloede

Menkhoff

2011

Euro Fin Management

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“…It is important to understand the households' perceptions in energy consumption relative to other households. This can indicate whether they take action to improve the energy performance of their dwelling [42,256]. Our study includes these types of factors in the regression analyses to evaluate the effects on renovation decisions.…”

Section: Behavioural Factors That Influence Homeowner Renovation Deci...mentioning

confidence: 99%

Understanding the decision-making process in homeowner energy retrofits

Ebrahimigharehbaghi

2022

Architecture and the Built Environment

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In 2020, owner-occupied housing accounted for 57% of the housing stock in the Netherlands. Homeowners are fully responsible for the implementation of energy retrofits. Moreover, the processes of energy retrofitting are complex and homeowners face problems such as finding financial support, reliable information and contractors. The complexity of implementing energy retrofits may discourage homeowners from continuing the process and achieving the expected benefits. Behavioural aspects and transaction costs (TC) are among the most important factors influencing consumer decision-making processes. Behavioural factors primarily illustrate a range of personal, contextual, and external factors that influence the decision-making process of homeowners. These include cognitive awareness and biases, attitudes and beliefs, experience and skills, homeowner characteristics, sociodemographic characteristics, property characteristics, and the behaviour of others. TC are any hidden costs that influence decision making but are not included in the direct physical costs of renovation services and products. This dissertation developed an integrated framework of behavioural factors and TC that impede the decisionmaking process for energy retrofits. Key findings include (1) the significant importance of behavioural factors and TC barriers. (2) the behavioural factors are particularly important in the early stages of energy retrofits and the TC barriers after the final decision. (3) the importance of behavioural factors and TC barriers differs according to the type of energy retrofit and non-energy retrofit. (4) Accounting for cognitive biases significantly improves the prediction of households' actual decisions about energy retrofits. This modelling is more accurate than the model that assumes households make rational decisions.

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“…It is important to understand the households' perceptions in energy consumption relative to other households. This can indicate whether they take action to improve the energy performance of their dwelling (Benoît et al, 2009;Larrick et al, 2007). Our study includes these types of factors in the regression analyses to evaluate the effects on renovation decisions.…”

Section: Behavioural Factors That Influence Homeowner Renovation Decisionsmentioning

confidence: 99%

Identification of the behavioural factors in the decision-making processes of the energy efficiency renovations: Dutch homeowners

Ebrahimigharehbaghi

Qian

Vries

et al. 2021

Building Research & Information

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Over half of all residential buildings in the Netherlands are owner-occupied. In this study, the influence of behavioural factors on individual decisions toward energy efficiency renovations (EERs) was investigated. This study focused on contextual (e.g. building characteristics), personal (e.g. awareness of energy consumption), and motivational factors (e.g. improving comfort). Logistic regression analyses were selected as the preferred method of analysis. The Netherlands's housing survey energy modules, which was conducted in 2018, was the basis of these analyses. 2878 homeowners were surveyed. Behavioural factors that influence the homeowners' decisions were investigated for four types of EERs: (1) double glazing, (2) insulation, (3) photovoltaic (PV) panel, and (4) sustainable heating. It was found that homeowners' preferences for double glazing were mainly influenced by the characteristics of the building and household and motivation to adopt EERs. Similarly, insulation and PV panels were to be mainly influenced by building characteristics. For sustainable heating, a combination of building and household characteristics and personal factors (e.g. deliberate gas reduction) influenced the decisions regarding this EER. None of the personal factors had a significant impact on the decisions regarding installation of double glazing; in contrast, the installation of PV panels was found to be highly influenced by these factors.

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Does the Better-than-Average Effect Show that People are Overconfident?: An Experiment

Cited by 6 publications

References 45 publications

Financial Professionals' Overconfidence: Is It Experience, Function, or Attitude?

Financial Professionals' Overconfidence: Is It Experience, Function, or Attitude?

Understanding the decision-making process in homeowner energy retrofits

Identification of the behavioural factors in the decision-making processes of the energy efficiency renovations: Dutch homeowners

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