Overconfidence and the 2D:4D ratio

This paper tests whether prenatal testosterone levels are related to overconfidence. We use a non-intrusive method called 2D:4D ratio to measure prenatal exposure to testosterone of subjects. Using data collected from students from a large university in Brazil, we find that testosterone is positively correlated with higher levels of overconfidence. We also find support that males and self-declared white persons are associated to higher overconfidence levels comparatively to females and self-declared non-white persons, respectively. We also find that the marginal effect of prenatal testosterone on overconfidence is higher for left-handed than for right-handed persons. This means that the role of the prenatal testosterone, as measured by the 2D:4D ratio, on overconfidence is more relevant to left-handed persons. Our work presents empirical evidence that prenatal testosterone is an important predictor of individuals' overconfidence behavior and that biological traits either attenuate or exacerbate such relationship. (c) 2020 Elsevier B.V. All rights reserved.