COGNITIVE SKILLS AND CONFIDENCE: INTERRELATIONS WITH OVERESTIMATION, OVERPLACEMENT AND OVERPRECISION.

ABSTRACT This experimental study measures the three major types of judgmental overconfidence in a within-subjects design. Performance-based overestimation and overplacement are elicited in a Raven Progressive Matrices test for general intelligence. Calibration-based overprecision is evaluated in a forecasting by confidence intervals task. This study takes a closer look at the interrelations of these different types. Moreover, as the main focus, it considers the effect of cognitive abilities on overconfidence. These are quantified in a cognitive reflection test. I find that cognitive skills are substantially interrelated with subjects' confidence levels. Although overconfidence in absolute terms (overestimation) is not affected by cognitive abilities, the effect on overconfidence in relative terms (overplacement) is positive and significant. Overprecision, the calibration-based type of overconfidence, is found to be significantly affected by cognitive capacity as well. Interval forecasts of cognitively more able subjects were much better calibrated than those of their peers who displayed substantial overconfidence in the precision of their forecasts. [ABSTRACT FROM AUTHOR]