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This paper examines the impact of shared decision-making on investor overconfidence. It analyzes data from 2,000 investors, 6,394 consumers, and hundreds of experimental participants to answer the question whether consumers who share the decision-making responsibility are less affected by investor overconfidence than those who decide on their own. Insights drawn from two representative datasets and two experimental studies suggest that people who share financial decisions with others are substantially less impacted by excessive confidence. However, sharing with family members and friends seems to be more effective in reducing the bias than sharing with a financial advisor. The processes of making either alternatives or unknown aspects of a decision more salient are independently tested in an experimental trial to shed light on the mechanism behind the decreasing impact of shared financial decision-making. The study provides consumers, financial institutions, and professional advisors with a feasible de-biasing tool to decrease overconfidence by highlighting unknown aspects of an investment in order to improve the quality of a consumer’s financial decisions under uncertainty.
