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Feeling Happy, Men? Please Avoid Major Financial Transactions Today

Even a mildly happy mood can make men overconfident in their abilities.
(Photo: travel_aficionado/Flickr)

(Photo: travel_aficionado/Flickr)

Hey guys, check it out: you’re being a tad overconfident. Watching Robin Williams do stand-up is not helping. Perhaps unsurprisingly, your women friends do not have this problem.

By the way, this is not good news for the economy.

This is the conclusion, more or less, of a new study by John Ifcher and Homa Zarghamee, researchers who’ve spent a fair amount of time thinking about how happiness might affect everyday economicdecision making. They already knew that people are more confident in themselves than they probably should be, and that men are generally more so than women. They also knew that happy people tend to view themselves more positively than others and do better on quizzes and other tasks.

When men get excited about funny videos, they’re more likely to get excited about their test-taking abilities as well.

But, Ifcher and Zarghamee wondered, what happens if you give them a good reason—money, that is—to judge their abilities correctly? It’s not an idle question, given the possibility that a few extra happy Wall Street traders might translate into overconfident buying and selling of the kind that creates stock market bubbles.

To find out, the pair first had 107 Santa Clara University undergraduates, including 50 women, take a 30-minute quiz featuring 20 trivia questions—for example, “Who ruled Iraq before Saddam Hussein?”—and 10 arithmetic problems. Quiz takers then watched either tranquil scenes from Alaska’s Denali National Park or selections from Robin Williams Live on Broadway—the experimenters chose at random which one. (The experiments were conducted in 2010, well before the comedian’s untimely death.)

Finally, each participant estimated how well they’d done on the quiz, and they had an incentive to get it right: $5 for an on-the-nose estimate, $3 for getting it within three points, and $1 for getting it within six points of their true score. That way, being overconfident in your abilities meant that “you’re actually making yourself worse off,” Zarghamee says.

Surprising no one, men were more confident than women—men overestimated their scores by about four points on average, while women overestimated by about two points. But men were also more susceptible to a few minutes’ entertainment. After controlling for actual quiz scores, men in the stand-up comedy group overestimated their scores by about two more points than men in the tranquil-mountain-scene condition. But there was no statistically distinguishable effect for women—no effect at all, in fact.

Zarghamee says they can’t be sure why there’s a difference between men and women’s responses to being put in a positive mood, though, in conversations with other researchers, an interesting possibility emerged. “The extent to which men regulate their emotions is different than women,” she says. In other words, when men get excited about funny videos, they’re more likely to get excited about their test-taking abilities as well.

More importantly, the experiments suggest that “good times ... can prop up the notion that we’re better at things than we really are,” Zarghemee says, and even expert decision makers are susceptible. If that’s right, good times could spell trouble for us all.