That people are overconfident doesn’t imply that they are more overconfident when they go against the majority opinion.
Investors that think too much they can beat the market receive lower return, but the market is probably smarter than the majority opinion.
I would even say that the pressure to conform is so strong that most people will be much more overconfident when they go with the wisdom of the crowd.
Could it be that as participants to a blog dedicated to rationality we are more overconfident and we resist the common opinion too much? It could, but I’d like to see some evidence.
That people are overconfident doesn’t imply that they are more overconfident when they go against the majority opinion. Investors that think too much they can beat the market receive lower return, but the market is probably smarter than the majority opinion.
I would even say that the pressure to conform is so strong that most people will be much more overconfident when they go with the wisdom of the crowd. Could it be that as participants to a blog dedicated to rationality we are more overconfident and we resist the common opinion too much? It could, but I’d like to see some evidence.