Peer-comparison overconfidence: Does it measure bias in self-evaluation?

ABSTRACT

Overconfidence is generally regarded as one of the most robust findings in the psychology of judgment. A precise method for evaluating overconfidence is essential if researchers are to validate these findings. Although peer-comparison questions are a convenient tool for measuring overconfidence, their validity has been questioned. We employed a specific paradigm to verify the validity, and the respondents were asked to predict a verifiable future event in a real-world setting that allowed empirical checking and comparison between the actual result and the prediction. Studies 1 and 2 found that the actual percentile of overconfidence could be accurately predicted using our initial calculation of participants' peer-comparison overconfidence in answering questions about academic performance. Study 3 found a similar effect when using questions related to job hunting. All studies indicated that peer-comparison questions are valid for measuring bias in self-evaluation. Thus, future studies could employ peer-comparison questions to investigate the domain specificity versus the domain generality of overconfidence.