Ulric B. and Evelyn L. Bray Social Sciences Seminar
Abstract: We experimentally study the effects of overconfidence on the quality of democratic choice in a common interest situation. In our setting, voters are exposed to correct or fake (incorrect) news, and must form a belief about how likely they are to receive correct news to decide whether or not to vote. The extent to which a subject is likely to observe correct news depends on his or her cognitive ability. Thus, absent overconfidence, more cognitively able subjects are predicted to vote while less able subjects are predicted to abstain, and information is predicted to aggregate well. We use a novel measure of overconfidence in one's cognitive ability to show that overconfidence induces those with inferior information to vote excessively, thus undermining the quality of democratic choice. Written with Melis Kartal (WU Vienna).