Overconfidence is one of the most prevalent cognitive biases that can negatively affect people’s judgment and decision quality. We investigate the neural correlates of overconfidence in dependence of neutral and joyful affect in a neuroimaging study (N = 16). Subjects’ affect was manipulated by presenting joyful and neutral pictures of the International Affective Picture System (IAPS). To measure overconfidence, we used an incentivecompatible task in which subjects answered general knowledge questions and subsequently made confidence judgments about their own performance. Our study reports two main findings: First, a higher activation in the anterior cingulate cortex when answering knowledge questions in a joyful mood compared to a neutral mood. Second, a lower activation in the hippocampus when making confidence judgments in a joyful mood compared to a neutral mood. Linking our neuronal results to our behavioral measures, we find a negative correlation for activation in the hippocampus with overconfidence and a positive correlation with actual performance. Our results imply that people who engage in retrieving and using prior memories and experiences through the hippocampus when making confidence judgments about their own performance can reduce their overconfidence and increase the quality of their decision outcome. The tendency to use prior memories and experiences from the hippocampus is less likely when people are in a joyful than when they are in a neutral mood.
|Title of host publication||Presentation at the NeuroPsychoEconomics Conference, May 29-30, 2014, Munich, Germany|
|Publication status||Published - 2014|