How Long to Read Impact of Overoptimism and Overconfidence on Economic Behavior

How Long Does it Take to Read Impact of Overoptimism and Overconfidence on Economic Behavior?

It takes the average reader 1 hour and 17 minutes to read Impact of Overoptimism and Overconfidence on Economic Behavior by Andreas Müller

Assuming a reading speed of 250 words per minute. Learn more

Description

Inhaltsangabe:Introduction: Economic theory normally focuses on rational agents optimizing individual utility. Since the second half of the 20th century, this viewpoint has been enriched by findings from the field of psychology. A new trait of research was created called behavioral economics . It takes into account subjective characteristics such as asymmetric preference and judgment, or limits of rational processing, willpower, and greed. This paper aims to give an overview of two related human traits that have attracted particularly wide interest, namely overconfidence and overoptimism. The two are closely related to each other, and often used synonymously. Broadly speaking, overconfidence results in underestimation of future risks, e.g. the riskiness of future cash flows, whilst overoptimism leads to an overestimation of future positive outcomes, e.g. the future returns of a company. Besides, the paper wants to deduct suggestions for further research, by systematically identifying uncovered topics in existing literature. Usually Alpert and Raiffa are credited with the first discovery of overconfidence. However, the most influential study is probably Russo and Schoemaker. It was published in the Sloan Management Review and communicated the topic to a broader audience for the first time. In particular, it revealed that assumingly rational managers were prone to overconfidence, too. This challenged traditional management doctrines and generated interest in a better understanding of the topic and further research. To exemplify overconfidence, Russo and Schoemaker asked managers to give numerical intervals for ten general-knowledge questions, such that nine out of the ten answers would be correct. On average participants included the correct value within their interval only 5 out of 10 times, i.e. they underestimated potential errors in their estimations. Svenson is probably the most influential source regarding overoptimism. He made the subject intuitively understandable and established a standard measurement method that could be easily used for subsequent research. To give an example of overoptimism: Svenson asked students to compare their driving skills to those of their classmates. Roughly 80% believed they belonged to the top 50%, i.e. they overestimated their abilities. This paper also provides a closer look at the empirical methods normally applied in field studies. Although the phenomena are intuitively understandable, empirical research [...]

How long is Impact of Overoptimism and Overconfidence on Economic Behavior?

Impact of Overoptimism and Overconfidence on Economic Behavior by Andreas Müller is 76 pages long, and a total of 19,456 words.

This makes it 26% the length of the average book. It also has 24% more words than the average book.

How Long Does it Take to Read Impact of Overoptimism and Overconfidence on Economic Behavior Aloud?

The average oral reading speed is 183 words per minute. This means it takes 1 hour and 46 minutes to read Impact of Overoptimism and Overconfidence on Economic Behavior aloud.

What Reading Level is Impact of Overoptimism and Overconfidence on Economic Behavior?

Impact of Overoptimism and Overconfidence on Economic Behavior is suitable for students ages 8 and up.

Note that there may be other factors that effect this rating besides length that are not factored in on this page. This may include things like complex language or sensitive topics not suitable for students of certain ages.

When deciding what to show young students always use your best judgement and consult a professional.

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