Homo Consumericus

The nature and nurture of consumption.

by Gad Saad, Ph.D.

I Am the Best! Is Overconfidence a Heritable Trait?

Does overconfidence run in families?

Published on May 12, 2010 by Gad Saad, Ph.D. in Homo Consumericus

Over the past thirty years or so, numerous studies many of which were carried out within the behavioral decision-making field, have established that the great majority of people suffer from overconfidence. Note that I alluded to the overconfidence bias in my previous post when discussing psychological traps that entrepreneurs succumb to (see here). I also discussed cross-cultural differences in overconfidence in an earlier post (see here). Typically, overconfidence is measured by administering a survey meant to gauge participants' general knowledge and/or cognitive abilities, subsequent to which the participants are asked how well they think that they've performed on the task. More often than not, people overestimate their performance and in so doing display the classic overconfidence bias. Here is a quick example of the overconfidence bias, as repeatedly displayed by my students throughout the years. In one of my lectures, I ask students to jot down on a piece of paper their sex, along with their self-ratings on looks and intelligence (below average, average, or above average). It would seem that I only attract Einstein-type supermodels to my courses!

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Is overconfidence a dispositional trait? In other words, are individual differences in the proclivity to be overconfident driven by one's personality, and if so is this a heritable trait? David Cesarini and his colleagues recently published a paper in the Journal of the European Economic Association wherein they tackled this issue via the use of the classic twins paradigm. They administered a survey, not unlike the one that I mentioned in the last paragraph, both to identical and fraternal twins. Subsequently and in line with the behavior genetics paradigm, they estimated the percentage of the variance in overconfidence that was due to genetic effects, shared environments, and non-shared environments. They found that genes accounted for roughly three times the percentage of the variance in the overconfidence scores as compared to that explained by the twins' shared environments. The genetic effects accounted for 34% or 16% of the percentage of variance explained depending on which of two overconfidence measures were used. By far though, the greatest percentage of the variance explained was due to the non-shared environments between the two sets of twins. The bottom line is that as is true of most traits, one's proclivity to be overconfident is shaped both by nature and nurture.

Source for Image:
http://www.composedvolcano.com/wp/wp-content/uploads/2009/06/over...