When Underconfident Behavior is Norm : Some Experimental Evidences from the Calibration Analysis

The over/underconfidence behavior has been explained as a bias of the cognitive process in the decision maker. Such bias has been mainly justified by the difficulty of the task or the problem to decide upon. It’s the so called 'hard-easy effect' (Lichtenstein and Fischhoff, 1977). In this paper we demonstrate that underconfidence dramatically increases whenever one's decision consequences are immediately known. In this way, we state that a closer time lapse between expectations and actual performance may trigger an alert signal in subjects. Such signal emotionally activates the loss aversion effect and makes most subjects turn into underconfident