ON THE IMPORTANCE OF RANDOM ERROR IN THE STUDY OF PROBABILITY JUDGMENT .2. APPLYING THE STOCHASTIC JUDGMENT MODEL TO DETECT SYSTEMATIC TRENDS

Erev, Wallsten, and Budescu (1994) and Budescu, Erev, and Wallsten (19 97) demonstrated that over-and underconfidence often observed in judgm ent studies may be due, in part, to the presence of random error and i ts effects on the analysis of the judgments. To illustrate this fact t hey showed that a general model that assumes that overt responses repr esenting (perfectly calibrated) true judgments perturbed by random err or can replicate typical patterns observed in empirical studies. In th is paper we provide a method for determining whether apparent overconf idence in empirical data reflects a systematic bias in judgment or is an artifact due solely to the presence of error. The approach is based , in part, on the Wallsten and Gonzalez-Vallejo (1994) Stochastic Judg ment Model (SJM). The new method is described in detail and is used to analyze results from a new study. The analysis indicates a clear over confidence effect, above and beyond the level predicted by a model ass uming perfect calibration perturbed by random error. (C) 1997 by John Wiley & Sons, Ltd.