Does the Better-Than-Average Effect Show That People Are Overconfident?: Two Experiments.

We conduct two experiements of the claim that people are overconfident. We develop new tests of overplacement which are based on a formal Bayesian model. Our two experiments, on easy quizzes, find overplacement. More precisely, we find apparently overconfident data that cannot be accounted for by a rational population of expected utility maximizers with a good understanding of the nature of the quizzes they took