I notice overconfidence bias and risk aversion seem to operate in opposite directions. Like, there’s a 90% chance of something being true, you say it’s 99% likely, and then you bet at 9 to 1 odds.
Do they tend to cancel? How well?
A while ago Yvain posted on Prospect Theory, which I think is salient to your query.
I notice overconfidence bias and risk aversion seem to operate in opposite directions. Like, there’s a 90% chance of something being true, you say it’s 99% likely, and then you bet at 9 to 1 odds.
Do they tend to cancel? How well?
A while ago Yvain posted on Prospect Theory, which I think is salient to your query.