Pride and Prejudice : Gender Differences in Overconfidence

Overconfidence is a common psychological phenomenon that exhibits gender differences. This paper uses a novel laboratory experiment to demonstrate not only that men are more confident than women in degree but also that men and women have different sources of overconfidence. Men are more overconfident about their position in the population (overplacement), while women are more overconfident about their beliefs (overprecision). The results of this paper demonstrate that women have an advantage in jobs that require corresponding abilities in the labor market because they are not overconfident when estimating their position. We also suggest that to reduce the overconfidence bubble in the asset market, female and male investors need different information to make accurate estimations