In an experiment concerning knowledge about personal finance, more than 90% of people claimed knowledge of at least one of three nonsense terms deliberately inserted by the researchers: “pre-rated stocks,” “fixed-rate deduction,” and “annualized credit.” These and other findings demonstrate that judging one’s knowledge is far from straightforward, say the researchers, led by Stav Atir of Cornell University. In assessing their knowledge, people draw on preexisting self-perceptions to make inferences about what they probably know – or what they should know.
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