On the Positive Effects of Overcon fident Self-Perception in Teams
AbstractIn this paper, we study the individual payoff effects of overconfident self-perception in teams. In particular, we demonstrate that the welfare of an overconfident agent in a team of one rational and one overconfident agent or a team of two overconfident agents can be higher than that of the members of a team of two rational agents. This result holds irrespective of the assumption about the agents' awareness of their colleague's bias. Moreover, we show that an overcondent agent is always better of when he is unaware of a potential bias of his colleague.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 12246.
Date of creation: Apr 2011
Date of revision:
Overconfidence; Team Production;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-24 (All new papers)
- NEP-CBE-2011-05-24 (Cognitive & Behavioural Economics)
- NEP-NEU-2011-05-24 (Neuroeconomics)
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