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The impact of shared financial decision making on overconfidence for married adults
Author(s) -
Warmath Dee,
Piehlmaier Dominik,
Robb Cliff
Publication year - 2019
Publication title -
financial planning review
Language(s) - English
Resource type - Journals
ISSN - 2573-8615
DOI - 10.1002/cfp2.1032
Subject(s) - overconfidence effect , quality (philosophy) , psychology , finance , actuarial science , economics , social psychology , philosophy , epistemology
Previous research has shown that overconfidence is associated with a decrease in the quality of decision making and, therefore, decision outcomes. However, less is known about the conditions or circumstances that reduce financial overconfidence. Using data from two national studies, this study was designed to provide insights into the dynamics of intrahousehold financial decision making by examining the role of shared decision making in reducing overconfidence bias. Findings suggest that a psychological sense of shared ownership of money is associated with lower levels of overconfidence. With regard to financial planning practice, these results suggest that married individuals who believe in shared ownership of household money tend to have lower levels of overconfidence.