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A Model of Positive Self-Image in Subjective Assessments

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  • Luís Santos-Pinto
  • Joel Sobel

Abstract

This paper suggests a mechanism that describes individuals' positive self-image in subjective assessments of their relative abilities. The mechanism assumes individuals have heterogeneous production functions that determine ability as a function of multiple skills; make skill-enhancing investments with the goal of maximizing their ability; and make ability comparisons using their own production function. Within this framework, the paper provides conditions under which there is positive self-image. Positive self-image is increasing in the ease of the task, the number of different skills needed for the task, and the variability of production technologies in the population.

Suggested Citation

  • Luís Santos-Pinto & Joel Sobel, 2005. "A Model of Positive Self-Image in Subjective Assessments," American Economic Review, American Economic Association, vol. 95(5), pages 1386-1402, December.
    • Handle: RePEc:aea:aecrev:v:95:y:2005:i:5:p:1386-1402
    Note: DOI: 10.1257/000282805775014245
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    References listed on IDEAS

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    1. Eric Van den Steen, 2004. "Rational Overoptimism (and Other Biases)," American Economic Review, American Economic Association, vol. 94(4), pages 1141-1151, September.
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