Matthew Levy|Joshua Tasoff
Exponential-growth bias and overconfidence
London School of Economics and Political Science|Claremont Graduate University
increasing evidence people underestimate magnitude compounding interest however people aware inability make calculations demand services ameliorate consequences deficiencies laboratory experiment find people exhibit substantial exponentialgrowth bias importantly overconfident ability answer questions involve exponential growth also exhibit overconfidence ability use spreadsheet answer questions evidence explains market solution exponentialgrowth bias forthcoming biased individuals suboptimally low demand tools services could improve financial decisions