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Virtual Economic Experiments

Citation

Chesney, T and Chuah, SH and Hoffmann, R and Hui, W and Larner, J, Virtual Economic Experiments, Social Interactions in Virtual Worlds, Cambridge University Press, K Lakkaraju, G Sukthankar, RT Wigand (ed), United Kingdom, pp. 218-250. ISBN 9781316422823 (2018) [Research Book Chapter]

DOI: doi:10.1080/15427560.2018.1464454

Abstract

© 2018, © 2018 The Institute of Behavioral Finance. Financial decision makers (lenders, insurers, advisees) often need to estimate how well others make decisions. Is knowledge a blessing or a curse when forecasting others' forecast accuracy? The authors show that this depends on its type. Within a single experimental setting, they identify and test 4 distinct information types that have different effects on forecast accuracy. First, the authors revisit the well-known “curse of knowledge” and show that it may have resulted from entirely arbitrary, uninformative anchors. Second, we show that in contrast, genuinely informative cues purged of anchoring potential enhance estimation accuracy. Third, richer, more detailed financial information has no effect even for participants better able to interpret it. Fourth, domain experts do not overimpute others' forecast ability. The authors conclude that in financial settings knowledge may be a blessing or a curse, or have no effect depending on its type.

Item Details

Item Type:Research Book Chapter
Research Division:Economics
Research Group:Applied economics
Research Field:Experimental economics
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Preference, behaviour and welfare
UTAS Author:Chuah, SH (Professor Swee-Hoon Chuah)
ID Code:137100
Year Published:2018
Deposited By:Economics and Finance
Deposited On:2020-01-31
Last Modified:2020-01-31
Downloads:0

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