Intuitive evaluation of likelihood judgment producers: evidence for a confidence heuristic

This research tests the hypothesis of Yates et al. (1996) that people prefer judgment producers who make extreme confidence judgments. In each of three experiments, college students evaluated two fictional financial advisors who judged the likelihood that each of several stocks would increase in value. One of the advisors (the moderate advisor) was reasonably well calibrated and the other (the extreme advisor) was overconfident. In all three experiments, participants tended to prefer the extreme advisor. Experiments 2 and 3 showed that the advisors' confidence influenced participants' perception of their knowledge, and Experiment 3 showed that it influenced their perception of the number of categorically correct judgments they made. Both of these variables were, in turn, related to participants' preferences. Experiment 3 also suggested that need for cognition and right-wing authoritarianism are positively related to preference for the extreme advisor. A quantitative model is presented, which captures the basic pattern of results. This model includes the assumption that people use a confidence heuristic; they assume that a more confident advisor makes more categorically correct judgments and is more knowledgeable.