A Simple Model of Self-Assessments

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A Simple Model of Self-Assessments

Author Info

Silvia Dominguez Martinez () (Faculty of Economics, Erasmus Universiteit Rotterdam)
Otto H. Swank (Faculty of Economics, Erasmus Universiteit Rotterdam)

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Abstract

We develop a simple model that describes individuals' self-assessments of their abilities. We assume that individuals learn about their abilities from appraisals of others and experience. Our model predicts that if communication is imperfect, then (i) appraisals of others tend to be too positive, and (ii) overconfidence leading to too much activism is more likely than underconfidence leading to too much passivity. The predictions of our model are consistent with findings in the social psychological literature.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 06-010/1.

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Date of creation: 17 Jan 2006
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Handle: RePEc:dgr:uvatin:20060010

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Find related papers by JEL classification:
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-04-22 (All new papers)
NEP-BEC-2006-04-22 (Business Economics)
NEP-CBE-2006-04-22 (Cognitive & Behavioural Economics)

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Markus K. Brunnermeier & Jonathan A. Parker, 2004. "Optimal Expectations," NBER Working Papers 10707, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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