Myopic biases in competitions

Abstract

In three studies using both laboratory and field data, we show that the focal competitor’s strengths and weaknesses feature more prominently in predictions of the outcomes of future competitions than do the strengths and weaknesses of the opponents. People are more confident when their own side is strong, regardless of how strong the competition is. We show that this effect is driven by the fact that people have better information about their own side than the other side, in part because they preferentially seek out information about their own side. Implications for theories of decision making in competitive settings are discussed.