Work harder or aim lower? Overconfidence and belief updating in the classroom

Building on recent lab experiments on belief updating, this study uses a university‐based field experiment to investigate behaviour change together with the updating of beliefs in response to feedback in a real‐life context. Postgraduate students predict their performance expectations for a core degree course in a probability distribution format where correct expectations are incentivised using a quadratic scoring rule. Behaviour, in the form of weekly time spent on the course, is also reported. Students then receive feedback in the form of graded tests and assignments, following which they repeat both the prediction exercise and the behaviour reporting. Cognitive dissonance theory predicts that where beliefs and performance feedback do not align, people will either change their beliefs to better conform to received feedback or change their behaviour so that performance better approximates their beliefs. In line with findings from lab experiments, results show that beliefs adjust to better predict true performance when feedback is received. Beliefs also become more precise (lower variance) with feedback. Evidence of behaviour change (time spent on the course) in response to feedback is also noted. The latter finding might account for some of the incomplete adjustment of beliefs often noted in the literature.