Abstract
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.
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