Theory and Decision

, Volume 69, Issue 1, pp 143–166 | Cite as

Overconfidence in tournaments: evidence from the field

Article

Abstract

This paper uses a field survey to investigate the quality of individuals’ beliefs of relative performance in tournaments. We consider two field settings, poker and chess, which differ in the degree to which luck is a factor and also in the information that players have about the ability of the competition. We find that poker players’ forecasts of relative performance are random guesses with an overestimation bias. Chess players also overestimate their relative performance but make informed guesses. We find support for the “unskilled and unaware hypothesis” in chess: high-skilled chess players make better forecasts than low-skilled chess players. Finally, we find that chess players’ forecasts of relative performance are not efficient.

Keywords

Tournaments Rationality Field experiment 

JEL Classification

A12 C93 J41 

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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.HSBC School of BusinessPeking UniversityBeijingChina
  2. 2.Faculty of Business and EconomicsUniversity of LausanneLausanneSwitzerland

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