# Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback

## Abstract

**:**

## 1. Introduction

“One of the keys to happiness is a bad memory.”Rita Mae Brown

## 2. Experimental Design

#### 2.1. Part 1 (Laboratory Experiment)

^{2}.

^{2}.

#### 2.2. Part 2 (Memory Recall Experiment)

- What was your ranking in terms of the number of mistakes in the last round? Your payoff for this question will be determined by the following formula: HKD 20 − 0.5 (actual ranking − your answered ranking in this question)
^{2}. - What was your number of mistakes in the word entry task in Round 5 out of the total number of words (100 words) in the paragraph? Your payoff for this question will be determined by the following formula: HKD 20 − 0.5 (actual number of mistakes − your answered number of mistakes in this question)
^{2}. - Were you overconfident in your forecast of the number of mistakes in Round 5 (i.e., was your forecast number of mistakes lower than the actual number of mistakes, e.g., you forecast 10 mistakes, but you actually made 15 mistakes)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- Were you overconfident in your forecast of your ranking in Round 5 (i.e., was your forecast ranking lower than the actual ranking, e.g., you were ranked number 10, but you forecast yourself to be number 5)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- Were you overconfident in your forecast of the number of mistakes in Round 1 (i.e., was your forecast number of mistakes lower than the actual number of mistakes, e.g., you forecast 10 mistakes, but you actually made 15 mistakes)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- Were you overconfident in your forecast of your ranking in Round 1 (i.e., was your forecast ranking lower than the actual ranking, e.g., you were ranked number 10, but you forecast yourself to be number 5)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- In the experiment, you participated in the word entry task for five rounds. In the ranking forecasts, in how many rounds were you overconfident (i.e., was your forecast ranking lower than the actual ranking, e.g., you were ranked number 10, but you forecast yourself to be number 5)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- In the experiment, you participated in the word entry task for five rounds. In terms of the number of mistakes forecast out the number of words you entered, in how many rounds were you overconfident (i.e., was your forecast number of mistakes lower than the actual number of mistakes, e.g., your forecast number of mistakes was 10, but you actually made 15 mistakes)? You will receive HKD 5 if your answer is correct, and zero otherwise.

## 3. Experimental Results

#### 3.1. Laboratory Experiment

**Result 1:**In the laboratory experiment, feedback significantly reduces overconfidence.

#### Social Comparison

#### 3.2. Memory Recall

#### 3.2.1. Overconfident Recall

#### 3.2.2. Underconfident Recall

**Result 2:**Overconfident (underconfident) subjects exhibit overconfident (underconfident) recall despite having received feedback on their overconfidence (underconfidence).

#### 3.2.3. Proportion of Correct Recall on Overconfidence in Forecasts

**Result 3:**Most subjects can remember correctly whether they were overconfident in the Round 1 forecasts, suggesting that awareness of overconfidence or underconfidence will not eliminate memory bias.

#### 3.2.4. Memory Recall Bias and Bias in Forecast

#### 3.3. Other Results on Memory Recall

#### 3.3.1. Recall of Good News vs. Bad News

#### 3.3.2. Primacy Effect vs. Recency Effect

**Result 4:**The primacy effect (remembering the first round better) is stronger than recency effect (remembering the last round better).

## 4. Discussion

## Funding

## Institutional Review Board Statement

## Informed Consent Statement

## Data Availability Statement

## Acknowledgments

## Conflicts of Interest

## Appendix A

**Table A1.**Comparisons on Main Variables between Subjects Who Participate in Part 1 Only and Those Who Participate in Both Parts 1 and 2.

Participate in Part 1 Only | Participate in Both Parts 1 and 2 | t-Test p-Value | |
---|---|---|---|

Performance | |||

Ranking (Round 1) | 7.62 | 5.87 | 0.00 *** |

Ranking (Round 2) | 7.05 | 6.47 | 0.32 |

Ranking (Round 3) | 7.41 | 6.44 | 0.09 * |

Ranking (Round 4) | 7.46 | 6.73 | 0.22 |

Ranking (Round 5) | 7.13 | 6.45 | 0.24 |

Number of mistakes (Round 1) | 31.44 | 21.47 | 0.02 ** |

Number of mistakes (Round 2) | 8.99 | 6.02 | 0.18 |

Number of mistakes (Round 3) | 10.14 | 5.35 | 0.02 ** |

Number of mistakes (Round 4) | 9.09 | 5.84 | 0.13 |

Number of mistakes (Round 5) | 10.37 | 7.47 | 0.34 |

Overconfident Forecast | proportion testp-value | ||

Ranking (Round 1) | 0.46 | 0.35 | 0.13 |

Ranking (Round 2) | 0.38 | 0.55 | 0.02 ** |

Ranking (Round 3) | 0.39 | 0.42 | 0.74 |

Ranking (Round 4) | 0.45 | 0.54 | 0.23 |

Ranking (Round 5) | 0.29 | 0.33 | 0.58 |

Number of mistakes (Round 1) | 0.59 | 0.55 | 0.63 |

Number of mistakes (Round 2) | 0.15 | 0.11 | 0.47 |

Number of mistakes (Round 3) | 0.23 | 0.11 | 0.04 ** |

Number of mistakes (Round 4) | 0.13 | 0.19 | 0.24 |

Number of mistakes (Round 5) | 0.20 | 0.21 | 0.77 |

Underconfident Forecast | |||

Ranking (Round 1) | 0.44 | 0.57 | 0.07 * |

Ranking (Round 2) | 0.49 | 0.36 | 0.07 * |

Ranking (Round 3) | 0.49 | 0.37 | 0.10 * |

Ranking (Round 4) | 0.46 | 0.26 | 0.16 |

Ranking (Round 5) | 0.47 | 0.39 | 0.30 |

Number of mistakes (Round 1) | 0.37 | 0.35 | 0.78 |

Number of mistakes (Round 2) | 0.79 | 0.82 | 0.65 |

Number of mistakes (Round 3) | 0.75 | 0.80 | 0.42 |

Number of mistakes (Round 4) | 0.79 | 0.70 | 0.14 |

Number of mistakes (Round 5) | 0.70 | 0.69 | 0.82 |

Gender | |||

Female | 0.59 | 0.69 | 0.17 |

Four or More Overconfident Forecasts | N | Less than Four Overconfident Forecasts | N | Proportion Test p-Value | |
---|---|---|---|---|---|

Overconfident recall on total number of overconfident forecasts | |||||

Rank | 0.60 | 20 | 0.23 | 64 | 0.00 *** |

Mistake | 0.50 | 4 | 0.10 | 80 | 0.02 ** |

Overconfident recall on Round 5 forecasts | |||||

Round 5 rank | 0.39 | 18 | 0.12 | 66 | 0.01 *** |

Round 5 mistake | 1 | 3 | 0.63 | 82 | 0.19 |

Four or More Underconfident Forecasts | N | Less than Four Underconfident Forecasts | N | Proportion Test p-Value | |
---|---|---|---|---|---|

Underconfident recall on total number of overconfident forecasts | |||||

Rank | 0.50 | 12 | 0.35 | 72 | 0.31 |

Mistake | 0.84 | 43 | 0.54 | 41 | 0.00 *** |

Underconfident recall on Round 5 forecasts | |||||

Round 5 rank | 0.67 | 12 | 0.32 | 72 | 0.02 ** |

Round 5 mistake | 0.32 | 44 | 0.17 | 41 | 0.12 |

## Appendix B

**Experimental Instructions for the Laboratory Experiment**

**Instructions**

^{2}.

^{2}.

- On a scale of 1 (not overconfident at all) to 10 (completely overconfident), how would you rate your degree of overconfidence in forecasting your number of mistakes in the word entry task?
- On a scale of 1 (not overconfident at all) to 10 (completely overconfident), how would you rate your degree of overconfidence in forecasting your ranking in the word entry task?
- Before participating in this experiment, were you aware that you might be overconfident?

## Appendix C

**Experimental Instructions for the E-mail and Survey Questions**

- Please enter your student ID no. (please enter the information accurately, otherwise we will not be able to pay you).
- Please enter your name (please enter the information accurately, otherwise we will not be able to pay you).
- In the experiment, you participated in the word entry task for five rounds. In your session, there were [number was provided here] participants. What was your ranking in terms of the number of mistakes in the last round? Your payoff for this question will be determined by the following formula: HKD 20 − 0.5 × (actual ranking − your answered ranking in this question)
^{2}. - What was your number of mistakes in the word entry task in Round 5 out of the total number of words (100 words) in the paragraph? Your payoff for this question will be determined by the following formula: HKD 20 − 0.5 × (actual number of mistakes − your answered number of mistakes in this question)
^{2}. - Were you overconfident in your forecast on your number of mistakes in Round 5 (i.e., was your forecast number of mistakes lower than the actual number of mistakes, e.g., you forecast 10 mistakes, but actually made 15 mistakes)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- Were you overconfident in your ranking forecast in Round 5 (i.e., was your forecast ranking lower than your actual ranking, e.g., you were ranked number 10, but you forecast yourself to be number 5)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- Were you overconfident in your forecast on the number of mistakes in Round 1 (i.e., was your forecast number of mistakes lower than the actual number of mistakes, e.g., you forecast 10 mistakes, but you actually made 15 mistakes)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- Were you overconfident in the ranking forecast in Round 1 (i.e., was your forecast ranking lower than the actual ranking, e.g., you were ranked number 10, but you forecast yourself to be number 5)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- In the experiment, you participated in the word entry task for five rounds. In the ranking forecasts, in how many rounds were you overconfident (i.e., was your forecast ranking lower than the actual ranking, e.g., you were ranked number 10, but you forecast yourself to be number 5)? You will receive HKD 5 if your answer is correct, and zero otherwise.
- In the experiment, you participated in the word entry task for five rounds. In terms of the number of mistakes you forecast out of the number of words you entered, in how many rounds were you overconfident (i.e., was your forecast number of mistakes lower than the actual number of mistakes, e.g., you forecast 10 mistakes, but you actually made 15 mistakes)? You will receive HKD 5 if your answer is correct, and zero otherwise.

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Recalling on | |
---|---|

1. | Round 5 rank |

2. | Round 5 mistake |

3. | Overconfidence of forecast (mistake) in Round 5 |

4. | Overconfidence of forecast (rank) in Round 5 |

5. | Overconfidence of forecast (mistake) in Round 1 |

6. | Overconfidence of forecast (rank) in Round 1 |

7. | Total number of overconfident forecast (rank) |

8. | Total number of overconfident forecast (mistake) |

Forecast | Round 1 | Round 2 | Round 3 | Round 4 | Round 5 |
---|---|---|---|---|---|

Overconfident | |||||

Number of mistakes | 0.57 | 0.13 | 0.17 | 0.16 | 0.20 |

Ranking | 0.40 | 0.47 | 0.40 | 0.49 | 0.31 |

Underconfident | |||||

Number of mistakes | 0.36 | 0.81 | 0.77 | 0.74 | 0.69 |

Ranking | 0.51 | 0.43 | 0.43 | 0.31 | 0.43 |

Overconfident Recall | Underconfident Recall | Correct Recall | |
---|---|---|---|

Total number of overconfident forecasts in the five rounds (rank) | 0.32 | 0.37 | 0.32 |

Total number of overconfident forecasts in the five rounds (mistake) | 0.12 | 0.69 | 0.20 |

Round 5 rank | 0.18 | 0.37 | 0.45 |

Round 5 number of mistakes | 0.65 | 0.25 | 0.11 |

Three or More Overconfident Forecasts | N | Less than Three Overconfident Forecasts | N | Proportion Test p-Value | |
---|---|---|---|---|---|

Overconfident recall on total number of overconfident forecasts | |||||

Rank | 0.51 | 35 | 0.18 | 49 | 0.00 *** |

Mistake | 0.40 | 10 | 0.08 | 74 | 0.00 *** |

Overconfident recall on Round 5 forecasts | |||||

Round 5 rank | 0.33 | 33 | 0.08 | 51 | 0.00 *** |

Round 5 mistake | 1.00 | 9 | 0.61 | 76 | 0.02 ** |

Three or More Underconfident Forecasts | N | Less than Three Underconfident Forecasts | N | Proportion Test p-Value | |
---|---|---|---|---|---|

Underconfident recall on total number of overconfident forecasts | |||||

Rank | 0.58 | 24 | 0.28 | 60 | 0.01 ** |

Mistake | 0.76 | 63 | 0.48 | 21 | 0.01 ** |

Underconfident recall on Round 5 forecasts | |||||

Round 5 rank | 0.56 | 25 | 0.29 | 59 | 0.02 ** |

Round 5 mistake | 0.28 | 64 | 0.14 | 21 | 0.20 |

Correct Recall | N | |
---|---|---|

Overconfident forecast (Round 1 rank) | 0.82 | 28 |

Underconfident forecast (Round 1 rank) | 0.82 | 50 |

Overconfident forecast (Round 5 rank) | 0.57 | 28 |

Underconfident forecast (Round 5 rank) | 0.77 | 35 |

Overconfident forecast (Round 1 mistake) | 0.79 | 47 |

Underconfident forecast (Round 1 mistake) | 0.69 | 29 |

Overconfident forecast (Round 5 mistake) | 0.50 | 18 |

Underconfident forecast (Round 5 mistake) | 0.57 | 58 |

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**MDPI and ACS Style**

Li, K.-K.
Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback. *Games* **2022**, *13*, 41.
https://doi.org/10.3390/g13030041

**AMA Style**

Li K-K.
Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback. *Games*. 2022; 13(3):41.
https://doi.org/10.3390/g13030041

**Chicago/Turabian Style**

Li, King-King.
2022. "Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback" *Games* 13, no. 3: 41.
https://doi.org/10.3390/g13030041