First, she might buy the shirt at a particular store because she is highly confident that she has found the best price and then later learn that the same shirt was available for less money elsewhere. Second, she may later learn that most other stores have higher prices - even though one or two stores may stock the item at a slightly lower price. And third, she may be far from confident in her judgments about the best price and still often be correct. These three possibilities show that confidence and accuracy do not always go hand in hand. The relationship between the two is called knowledge calibration.
Calibration refers to the match between confidence and accuracy, rather than accuracy itself.
A recent paper by J. Wesley Hutchinson, who teaches marketing at Wharton, and Joseph W. Alba, a marketing professor at the University of Florida in Gainesville, sets out to explore these themes. They then adopt a time-based perspective to review a wide variety of empirical results. Finally, Alba and Hutchinson examine the theoretical explanations that have been given for calibration phenomena and offer suggestions for future research. Discussing his research, Hutchinson explains that the relationship between confidence about knowledge and its accuracy has implications beyond consumer research. For instance, CEOs routinely ask sales managers about the likelihood that sales targets will be met in the next few quarters.