Assistant Professor of Marketing
Behavioral Decision Making; Overconfidence; Calibration; Judgment; Decision Analysis;
Journal Article | Management Science | 63 | December 2017
Known Unknowns: A Critical Determinant of Confidence and Calibration
The authors propose that an important determinant of judged confidence is the evaluation of evidence that is unknown or missing, and overconfidence is often driven by the neglect of unknowns. They contrast this account with prior research suggesting that overconfidence is due to biased processing of known evidence in favor of a focal hypothesis.In Study 1, the authors asked participants to list their thoughts as they answered two- alternative forced-choice trivia questions and judged the probability that their answers were correct. Participants who thought more about unknowns were less overconfident. In Studies 2 and 3, they asked participants to list unknowns before assessing their confidence. “Considering the unknowns” reduced overconfidence substantially and was more effective than the classic “consider the alternative” debiasing technique.Moreover, considering the unknowns selectively reduced confidence in domains where participants were overconfident but did not affect confidence in domains where participants were well-calibrated or underconfident.