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INDUCING OVERCONFIDENCE
Author(s) -
Silva Francisco
Publication year - 2017
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12388
Subject(s) - overconfidence effect , task (project management) , argument (complex analysis) , psychology , economics , microeconomics , cognitive psychology , computer science , social psychology , management , medicine
In this study, I present a theory which explains how the influence of others may generate overconfidence. The argument is built on the idea that the more help an agent receives when performing a task, the less informative the score on that task will be relative to the agent's ability to perform it. If an agent is confident, he tends to benefit from more cooperation opportunities simply because he is likely to be perceived as being more skilled. As a result, he remains confident because the future signals he will observe will contain very little information regarding his ability. On the contrary, if the agent is not confident, he will receive more informative scores, which will help him learn his true ability faster. ( JEL D81, D83, D84)