Sampling, Overconfidence, and Consumer Decisions

Jack B. Soll, Duke University, USA
Joshua Klayman, University of Chicago, USA
This talk will discuss recent research on overconfidence in interval estimates. In studies of intervals, participants assess 90% intervals of unknown quantities (e.g., “I’m 90% sure that the store closes between nine and ten”). A robust empirical result is that people are overconfident – their 90% intervals contain the true answer only 40-50% of the time. We discuss underlying mechanisms related to sampling, either from the environment or from memory. An understanding of these mechanisms is useful for developing procedures to reduce overconfidence and improve estimation. We also discuss implications for consumers and marketers.
[ to cite ]:
Jack B. Soll and Joshua Klayman (2007) ,"Sampling, Overconfidence, and Consumer Decisions", in NA - Advances in Consumer Research Volume 34, eds. Gavan Fitzsimons and Vicki Morwitz, Duluth, MN : Association for Consumer Research, Pages: 268-270.