Question

Overclaiming Study

Valuing expertise is important for modern life. When people have a problem, they need to know who to turn to for a solution to their problem. For example, when people get sick, they know that a doctor is an expert in the field of medicine and can help them get better. In general, experts simply know more about a topic than do non-experts. However, experts may be vulnerable to a particular problem of knowing so much. They may have the illusion that they know more about a topic than they actually do.

This particular type of overconfidence is called overclaiming. Essentially, overclaiming occurs when people claim that they know something that is impossible to know, such as claiming to know the capital of Sharambia (a country that doesn’t actually exist).

To test if experts are susceptible to overclaiming, Atir, Rosenzweig, and Dunning (2015) recruited 202 individuals from an online participant pool. They first asked participants to complete either a measure of self-perceived knowledge, or an overclaiming task. The self-perceived knowledge questionnaire asked people to indicate their level of knowledge in the area of personal finance. The overclaiming task asked participants to indicate how much they knew about 15 terms related to personal finance (e.g., home equity). Included in the 15 items were three terms that do not actually exist (e.g., annualized credit). Thus, overclaiming occurred when participants said that they were knowledgeable about the non-existent terms. Finally, participants completed a test of financial literacy called the FINRA. Whereas the earlier questionnaires measured self-perceived knowledge, the FINRA measured actual knowledge.

Their results are shown in Tables 1 and 2 below.

Table 1
Correlations Among the Variables in the Study

	Overclaiming	Self-Perceived Knowledge
Self-Perceived Knowledge	.481***
Actual Knowledge	-.038	.318***
. ***p < .001

Table 2
Prediction of Overclaiming

Predictor	b	SE	t	beta
Self-Perceived Knowledge	0.11	0.01	8.60	0.55***
Actual Knowledge	-0.04	0.01	-3.32	-0.21**

Note. ^**p < .01    ^***p < .001

1. What conclusions can you reach by looking at Table 1? Write sentences that could appear in a newspaper article. That means you should NOT use the words positive, negative, correlation, or statistically significant.

2. What conclusions can you reach by looking at Table 2? Write sentences that could appear in a newspaper article. That means you should NOT use the words positive, negative, multiple regression, or statistically significant. Although you should not use the phrase “multiple regression,” I should be able to tell that you are describing the results from a multiple regression; that is, the sentences should be different from the sentences you wrote in the previous item. Note: The results in the multiple regression look inconsistent with the results of the correlations. Don’t let that spook you; just identify the conclusions you can reach from the multiple regression

Answer 1

a)

Answer:

The result shows that,

As the people claim to have a higher level of knowledge (higher self-perceived knowledge), it is likely that they are susceptible to overclaiming. However, the overclaiming doesn't depend on the actual knowledge of the people. But it is likely that the people with higher actual knowledge claim to have a higher level of knowledge

Explanation:

There is a moderate positive correlation between the dependent variable overclaiming and the self-perceived knowledge, no correlation between the dependent variable overclaiming and the actual knowledge, and the moderate positive correlation between the two independent variables, self-perceived knowledge, and actual knowledge.

b)

Answer:

The result shows that,

As the people claim to have a higher level of knowledge (higher self-perceived knowledge), it is very likely that they are susceptible to overclaiming. Also, as people have higher actual knowledge, it is likely that they are susceptible to overclaiming.

The result from the regression analysis is not consistent with the correlation analysis.

Explanation:

The regression analysis shows that,

the independent variable self-perceived knowledge significant at a 0.1% significant level hence significantly fit the model. and the independent variable actual knowledge significant at 1% significant level hence significantly fit the model.

The correlation analysis shows that the dependent variable overclaiming doesn't depend on the actual knowledge but the regression analysis shows a significant relationship hence the result is inconsistence.