Self-Confidence in Information Processing: Experimental Methods and Evidence | Sidak Yntiso

Do individuals interpret ambiguous feedback optimistically or pessimistically when their self-esteem is at stake? Ertac (2011) finds that generally people overweigh negative performance feedback, which leads to overly-pessimistic beliefs about ability. If these results are valid and generalizable, more studies are necessary to study the effects and extent of pessimism. Towards this end, I have replicated Ertac’s experiment with a number of differences in methodology (performance groups, signal and payment). In confirmation of her findings, after participants received an accurate yet negative signal, there was a significant pessimistic effect in belief updating. This paper also compares belief-accuracy across two types of belief elicitation mechanisms – the quadratic scoring rule and the crossover mechanism. There is no significant difference in belief accuracy between the two mechanisms.

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