True Overconfidence in Interval Estimates: Evidence Based on a New Measure of Miscalibration

Overconfidence is often regarded as one of the most prevalent judgment biases. Several studies show that overconfidence can lead to suboptimal decisions of investors, managers, or politicians. Recent research, however, questions whether overconfidence should be regarded as a bias and shows that standard “overconfidence” findings can easily be explained by different degrees of knowledge of agents plus a random error in predictions. We contribute to the current literature and ongoing research by extensively analyzing interval estimates for knowledge questions, for real financial time series, and for artificially generated charts. We thereby suggest a new method to measure overconfidence in interval estimates, which is based on the implied probability mass behind a stated prediction interval. We document overconfidence patterns, which are difficult to reconcile with rationality of agents and which cannot be explained by differences in knowledge as differences in knowledge do not exist in our task. Furthermore, we show that overconfidence measures are reliable in the sense that there exist stable individual differences in the degree of overconfidence in interval estimates, thereby testing an important assumption of behavioral economics and behavioral finance models: stable individual differences in the degree of overconfidence across people. We do this in a “field experiment,” for different levels of expertise of subjects (students on the one hand and professional traders and investment bankers on the other hand), over time, by using different miscalibration metrics, and for tasks that avoid common weaknesses such as a non‐representative selection of trick questions. Copyright © 2012 John Wiley & Sons, Ltd.     

Sleep Symptoms as a Partial Mediator Between Combat Stressors and Other Mental Health Symptoms in Iraq War Veterans

Sleep symptoms are a prominent feature of mental health disorders like PTSD and depression. However, it is unknown whether sleep symptoms mediate the relationship between combat stress and these disorders. We examined the mediating role of sleep symptoms on the relationship between combat stress and PTSD; and the relationship between combat stress and depression using data from 576 Army veterans of the Iraq War surveyed in 2004. Correlational analyses revealed that when insomnia was included in the model, the correlation between combat stressors and other depression symptoms decreased by 65%; and when nightmares were included in the model, the correlation between combat stressors and other PTSD symptoms decreased by 69%. We replicated these analyses using individual items assessing PTSD and depression and found that the insomnia and nightmare items had the largest and second largest mediation effect between combat stressors and PTSD and depression symptoms. Our result support the theory that sleep symptoms contribute to the development and/or maintenance of other mental health symptoms and that early treatment of sleep symptoms may mitigate the other mental health consequences of combat stress.     

“Drive On”: The Relationship Between Psychological Variables and Effective Squad Leadership

The U.S. Reserve Officer Training Program (ROTC) conducts systematic assessments of cadets’ leadership abilities during field training exercises (FTX) to assess their leadership abilities. While cadets in ROTC programs learn specific tactical operation procedures to augment FTX performances, much less is known about the relationship between psychological variables and squad leadership performance. To this end, 220 cadets completed self-efficacy, psychological flexibility, and grit questionnaires, which were then compared to FTX performance scores. Results underscored that only self-efficacy was significantly related to cadets’ squad leadership ability. Furthermore, prior service in the U.S. Army had no effect on the performance score one attained, highlighting an interesting paradox. Therefore, while self-efficacy can be cultivated through prior experiences, it seems more prudent to educate ROTC cadets on how to apply psychological skills to bolster self-efficacy in preparation for upcoming challenging leadership experiences.     

On Johnson's (2000) Relative Weights Method for Assessing Variable Importance: A Reanalysis

This article provides a reanalysis of J. W. Johnson's (2000) “relative weights” method for assessing variable importance in multiple regression. The primary conclusion of the reanalysis is that the derivation of the method is theoretically flawed and has no more validity than the discredited method of Green, Carroll, and DeSarbo (1978) on which it is based. By means of 2 examples, supplemented by other results from the literature, it is also shown that the method can result in materially distorted inferences when it is compared with another widely used importance metric, namely, general dominance (Azen & Budescu, 2003; Budescu, 1993). Our primary recommendation is that J. W. Johnson's (2000) relative weights method should no longer be used as a variable importance metric for multiple linear regression. In the final section of the article, 2 additional recommendations are made based on our analysis, examples, and discussion.     

How Bias Reduction Is Affected by Covariate Choice,Unreliability, and Mode of Data Analysis: Results From Two Types of Within-Study Comparisons

This study uses within-study comparisons to assess the relative importance of covariate choice, unreliability in the measurement of these covariates, and whether regression or various forms of propensity score analysis are used to analyze the outcome data. Two of the within-study comparisons are of the four-arm type, and many more are of the three-arm type. To examine unreliability, simulations of differences in reliability are deliberately introduced into the 2 four-arm studies. Results are similar across the samples of studies reviewed with their wide range of non-experimental designs and topic areas. Covariate choice counts most, unreliability next most, and the mode of data analysis hardly matters at all. Unreliability has larger effects the more important a covariate is for bias reduction, but even so the very best covariates measured with a reliability of only .60 still do better than substantively poor covariates that are measured perfectly. Why regression methods do as well as propensity score methods used in several different ways is a mystery still because, in theory, propensity scores would seem to have a distinct advantage in many practical applications, especially those where functional forms are in doubt.     

Cognitive deficits of executive functions and decision‐making in obsessive‐compulsive disorder

The nature of cognitive deficits in obsessive‐compulsive disorder (OCD) is characterized by contradictory findings in terms of specific neuropsychological deficits. Selective impairments have been suggested to involve visuospatial memory, set shifting, decision‐making and response inhibition. The aim of this study was to investigate cognitive deficits in decision‐making and executive functioning in OCD. It was hypothesized that the OCD patients would be less accurate in their responses compared to the healthy controls in rational decision‐making on a version of the Cambridge gambling task (CGT) and on the color‐word interference test and on a version of the Tower of Hanoi test (tower test) of executive functioning. Thirteen participants with OCD were compared to a group of healthy controls (n = 13) matched for age, gender, education and verbal IQ. Results revealed significant differences between the OCD group and the healthy control group on quality of decision‐making on the CGT and for achievement score on the tower test. On these two tasks the OCD group performed worse than the healthy control group. The symptom‐dimension analysis revealed performance differences where safety checking patients were impaired on the tower test compared to contamination patients. Results are discussed in the framework of cognition and emotion processing and findings implicate that OCD models should address, specifically, the interaction between cognition and emotion. Here the emotional disruption hypothesis is forwarded to account for the dysfunctional behaviors in OCD. Further implications regarding methodological and inhibitory factors affecting cognitive information processing are highlighted.     

Belief Norms and Blindspots

I defend the thesis that beliefs are constitutively normative from two kinds of objections. After clarifying what a “blindspot” proposition is and the different types of blindspots there can be, I show that the existence of such propositions does not undermine the thesis that beliefs are essentially governed by a negative truth norm. I argue that the “normative variance” exhibited by this norm is not a defect. I also argue that if we accept a distinction between subjective and objective norms, there need be no worrying tension between doxastic norms of truth and doxastic norms of evidence. I show how a similar approach applies to the attitude of guessing. I then suggest that if we distinguish between practical and theoretical rationality, we will prefer a negative form of norm that does not positively oblige us to form beliefs. I finish by considering an alternative possible subjunctive form of norm that would also avoid problems with blindspots, but I suggest this has a nonintuitive consequence.     

Standing Helpless at the Roar and Surging of the Sea

The classical questions of theodicy are regularly brought to the fore by large catastrophes, such as the recent tsunami. The present article reviews a number of responses in early Jewish literature, arguing that a traditional paradigm, based on the idea of retribution and clearly exhibited in deuteronomistic history, lies at the bottom of most – if not all – of these. Today, moralizing as well as apocalyptic readings are rendered meaningless by our evolutionary worldview. Catastrophes are often caused by those very properties of nature that have made the evolution of human life and society possible. We thus need a modified understanding of divine purpose and control. From such a perspective, three gospel texts are discussed: the stilling of the storm, the tower of Siloam and part of Jesus’ eschatological discourse. While trust in God's control in view of natural disasters is difficult to expect, some of these texts may be read against traditional paradigms as invitations to co-operation and common responsibility in relieving human suffering. This is part of the evolution of human life that in the end might help us to find moral, future and even divine purpose.