I know—I didn’t mean they’re justified by a standard rational utility maximization analysis. The point was just that it’s consistent with general overconfidence/miscalibration we observe in people in many other areas, even under the unfavorable assumptions thomblake gave.
ETA: Note that I said the incentives explain the numerous people who compete, not that the incentives justify such action. Also, I said it was “disproportionate motive force”. And no, I didn’t edit the original post just so it would have all that. :-P
I know—I didn’t mean they’re justified by a standard rational utility maximization analysis. The point was just that it’s consistent with general overconfidence/miscalibration we observe in people in many other areas, even under the unfavorable assumptions thomblake gave.
ETA: Note that I said the incentives explain the numerous people who compete, not that the incentives justify such action. Also, I said it was “disproportionate motive force”. And no, I didn’t edit the original post just so it would have all that. :-P