Overconfidence is a well-established bias in which someone's subjective confidence in their own judgments is systematically greater than their objective accuracy. There is abundant anecdotal evidence that overconfident people increase their exposure to risk. In this paper, we test whether...

Consumers can defuse the financial risks of credit default by taking payment protection insurance (PPI). In two studies, predictions derived from Huber’s risk defusing operator theory of decision making were tested. We investigated the effects on PPI judgements and decisions of previous...