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MedLine Citation:
PMID:  23049164     Owner:  NLM     Status:  Publisher    
Financial decisions about investing and saving for retirement are increasingly complex, requiring financial knowledge and confidence in that knowledge. Few studies have examined whether direct assessments of individuals' confidence are related to the outcomes of their financial decisions. Here, we analyzed data from a national sample recruited through RAND's American Life Panel (ALP), an internet panel of U.S. adults aged 18 to 88. We examined the relationship of confidence with self-reported and actual financial decisions, using four different tasks, each performed by overlapping samples of ALP participants. The four tasks were designed by different researchers for different purposes, using different methods to assess confidence. Yet, measures of confidence were correlated across tasks, and results were consistent across methodologies. Confidence and knowledge showed only modest positive correlations. However, even after controlling for actual knowledge, individuals with greater confidence were more likely to report financial planning for retirement and to successfully minimize fees on a hypothetical investment task. Implications for the role of confidence (even if it is unjustified) in investment behavior is discussed.
Andrew M Parker; Wändi Bruine de Bruin; Joanne Yoong; Robert Willis
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Publication Detail:
Type:  JOURNAL ARTICLE     Date:  2011-6-15
Journal Detail:
Title:  Journal of behavioral decision making     Volume:  25     ISSN:  1099-0771     ISO Abbreviation:  J Behav Decis Mak     Publication Date:  2012 Oct 
Date Detail:
Created Date:  2012-10-10     Completed Date:  -     Revised Date:  -    
Medline Journal Info:
Nlm Unique ID:  8809952     Medline TA:  J Behav Decis Mak     Country:  -    
Other Details:
Languages:  ENG     Pagination:  382-389     Citation Subset:  -    
RAND Corporation, Pittsburgh, PA.
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