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Strategically delusional

Author

Listed:
  • Alice Solda

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique, QUT - Queensland University of Technology [Brisbane])

  • Changxia Ke

    (QUT - Queensland University of Technology [Brisbane])

  • Lionel Page

    (UTS - University of Technology Sydney)

  • William von Hippel

    (UQ [All campuses : Brisbane, Dutton Park Gatton, Herston, St Lucia and other locations] - The University of Queensland)

Abstract

We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. We design an experiment in which participants are incentivised either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants' ability to gather information about their performance. Our results provide the different empirical links of von Hippel and Trivers' (2011) theory of strategic overconfidence. First, we find that participants are more likely to overestimate their performance when they anticipate that they will try to persuade others. Second, when offered the possibility to gather information about their performance, they bias their information search in a manner conducive to receiving more positive feedback. Third, the increase in confidence generated by this motivated reasoning has a positive effect on their persuasiveness.

Suggested Citation

  • Alice Solda & Changxia Ke & Lionel Page & William von Hippel, 2019. "Strategically delusional," Working Papers halshs-02050263, HAL.
    • Handle: RePEc:hal:wpaper:halshs-02050263
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02050263
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    Other versions of this item:

    • Alice Solda & Changxia Ke & Lionel Page & William von Hippel, 2019. "Strategically delusional," Working Paper Series 2019/05, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    • Alice Soldà & Changxia Ke & Lionel Page & William von Hippel, 2019. "Strategically delusional," Working Papers 1908, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

    References listed on IDEAS

    as
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    2. Antonio A. Arechar & Simon Gächter & Lucas Molleman, 2018. "Conducting interactive experiments online," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 99-131, March.
    3. Dominic D. P. Johnson & James H. Fowler, 2011. "The evolution of overconfidence," Nature, Nature, vol. 477(7364), pages 317-320, September.
    4. Heifetz, Aviad & Shannon, Chris & Spiegel, Yossi, 2007. "What to maximize if you must," Journal of Economic Theory, Elsevier, vol. 133(1), pages 31-57, March.
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    Citations

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    Cited by:

    1. Friehe, Tim & Pannenberg, Markus, 2021. "Time preferences and overconfident beliefs: Evidence from germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 92(C).
    2. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2020. "Feedback spillovers across tasks, self-confidence and competitiveness," Games and Economic Behavior, Elsevier, vol. 123(C), pages 127-170.
    3. Kai Barron & Christina Gravert, 2022. "Confidence and Career Choices: An Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(1), pages 35-68, January.
    4. Thaler, Michael, 2021. "Gender differences in motivated reasoning," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 501-518.
    5. Kaplan, Steven N. & Sørensen, Morten & Zakolyukina, Anastasia A., 2022. "What is CEO overconfidence? Evidence from executive assessments," Journal of Financial Economics, Elsevier, vol. 145(2), pages 409-425.
    6. Claire Rimbaud & Alice Soldà, 2021. "Avoiding the Cost of your Conscience: Belief Dependent Preferences and Information Acquisition," Working Papers halshs-03325963, HAL.
    7. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," SciencePo Working papers Main hal-03770685, HAL.
    8. Jeroen Nieboer, 2022. "Positional enhancement in effort-based social comparisons," Discussion Papers 2022-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    9. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," Working Papers hal-03770685, HAL.
    10. Solda, Alice & Ke, Changxia & von Hippel, Bill & Page, Lionel, 2021. "Absolute vs. relative success: Why overconfidence is an inefficient equilibrium," SocArXiv 9jw7a, Center for Open Science.
    11. Lata Gangadharan & Philip J. Grossman & Nina Xue, 2022. "Stepping Stone: Identifying self-image concerns from motivated beliefs: Does it matter how and whom you ask?," Monash Economics Working Papers 2022-05, Monash University, Department of Economics.
    12. Haeussler, Carolin & Vieth, Sabrina, 2022. "A question worth a million: The expert, the crowd, or myself? An investigation of problem solving," Research Policy, Elsevier, vol. 51(3).
    13. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03770685, HAL.
    14. Sharma, Karmini & Castagnetti, Alessandro, 2023. "Demand for information by gender: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 172-202.

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    More about this item

    Keywords

    Overconfidence; motivated cognition; self-deception; persuasion; information sampling; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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