Joy Leads to Overconfidence, and a Simple Countermeasure

Philipp Koellinger; Theresa Treffers

doi:10.1371/journal.pone.0143263

Joy Leads to Overconfidence, and a Simple Countermeasure

PLoS One. 2015 Dec 17;10(12):e0143263. doi: 10.1371/journal.pone.0143263. eCollection 2015.

Authors

Philipp Koellinger^{1

2

3}, Theresa Treffers⁴

Affiliations

¹ Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands.
² Faculty of Economics and Business, University of Amsterdam, Amsterdam, The Netherlands.
³ Department of Complex Trait Genetics, Center for Neurogenomics and Cognitive Research, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands.
⁴ School of Industrial Engineering & Innovation Sciences, Eindhoven University of Technology, Eindhoven, The Netherlands.

Abstract

Overconfidence has been identified as a source of suboptimal decision making in many real-life domains, with often far-reaching consequences. This study identifies a mechanism that can cause overconfidence and demonstrates a simple, effective countermeasure in an incentive-compatible experimental study. We observed that joy induced overconfidence if the reason for joy (an unexpected gift) was unrelated to the judgment task and if participants were not made specifically aware of this mood manipulation. In contrast, we observed well-calibrated judgments among participants in a control group who were in their resting mood. Furthermore, we found well-calibrated judgments among participants who received the joyful mood induction together with questions that forced them to reflect on their current mood and the (ir)relevance of its cause to our judgment tasks. Our findings suggest that being aware of one's positive mood and the reason for that mood may effectively reduce overconfidence for a short period.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Decision Making
Female
Happiness*
Humans
Male

Grants and funding

The authors acknowledge financial aid from the Erasmus Research Institute of Management and the German Research Foundation (PI 97/15-1). The authors are also grateful for organizational support from the Munich Experimental Laboratory for Economic and Social Sciences and the Erasmus Behavioral Lab. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.