Abstract
Several studies indicate that humans are overconfident about their own (relative) abilities. We propose a notion of pragmatic beliefs, and show through an example that this concept can shed light on why overconfidence emerges. Through the example, we also shed light on the idea that ‘bounded rationality’ may arise endogenously in a game—without assuming complexity costs.
| Original language | English |
|---|---|
| Pages (from-to) | 15-28 |
| Number of pages | 15 |
| Journal | Journal of Economic Behavior and Organization |
| Volume | 48 |
| Issue number | 1 |
| Early online date | 29 Mar 2002 |
| DOIs | |
| Publication status | Published - May 2002 |
Keywords
- bounded rationality
- overconfidence
- pragmatic beliefs