The confidence heuristic: A game-theoretic analysis

The paper analyzes two-person decision-making problems where information is asymmetric. A model is proposed in which information is revealed according to a social norm, whereby more confidently expressed arguments signal better information, and it is shown that efficient revelation of information ca...

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Bibliographic Details
Published in:Journal of economic psychology 1995-03, Vol.16 (1), p.97-113
Main Authors: Thomas, Jonathan P., McFadyen, Ruth G.
Format: Article
Language:English
Subjects:
Biological and medical sciences
Decision making
Decision making models
Decision theory
Fundamental and applied biological sciences. Psychology
Game theory
Group dynamics
Information
Prejudice
Psychological aspects
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Social attribution, perception and cognition
Social psychology
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Summary:The paper analyzes two-person decision-making problems where information is asymmetric. A model is proposed in which information is revealed according to a social norm, whereby more confidently expressed arguments signal better information, and it is shown that efficient revelation of information can take place, and decision-making is based on expressed confidence (“the confidence heuristic”). This process leads to group polarization. The model is generalized to take account of the possibility that some individuals may act irrationally or in a prejudiced manner. If the number of prejudiced individuals in the population is sufficiently large, then the norm will break down.
ISSN:0167-4870
1872-7719
DOI:10.1016/0167-4870(94)00032-6