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Strategically delusional

Author

Listed:
  • Alice Soldà

    (Heidelberg University
    GATE UMR 5824
    Queensland University of Technology)

  • Changxia Ke

    (Queensland University of Technology)

  • Lionel Page

    (University of Technology Sydney)

  • William von Hippel

    (University of Queensland)

Abstract

We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. To address this question, we design an experiment in which participants are incentivized 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 show that participants are more likely to (1) overestimate their performance when they anticipate that they will try to persuade others and (2) bias their information search in a manner conducive to receiving more positive feedback, when given the chance to do so. In addition, we also find suggestive evidence that this increase in confidence has a positive effect on participants’ persuasiveness.

Suggested Citation

  • Alice Soldà & Changxia Ke & Lionel Page & William von Hippel, 2020. "Strategically delusional," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 604-631, September.
  • Handle: RePEc:kap:expeco:v:23:y:2020:i:3:d:10.1007_s10683-019-09636-9
    DOI: 10.1007/s10683-019-09636-9
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    Citations

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    Cited by:

    1. Kai Barron & Christina Gravert, 2022. "Confidence and Career Choices: An Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(1), pages 35-68, January.
    2. Thaler, Michael, 2021. "Gender differences in motivated reasoning," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 501-518.
    3. Claire Rimbaud & Alice Soldà, 2024. "Avoiding the cost of your conscience: belief dependent preferences and information acquisition," Experimental Economics, Springer;Economic Science Association, vol. 27(3), pages 491-547, July.
    4. 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.
    5. 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.
    6. 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.
    7. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," Working Papers hal-03770685, HAL.
    8. Soldà, Alice & Ke, Changxia & von Hippel, William & Page, Lionel, 2021. "Absolute vs. relative success: Why overconfidence is an inefficient equilibrium," Working Papers 0700, University of Heidelberg, Department of Economics.
    9. Burro, Giovanni & Castagnetti, Alessandro, 2024. "The ego is no fool: Absence of motivated belief formation in strategic interactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    10. 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.
    11. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03770685, HAL.
    12. 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).
    13. Anton Suvorov & Jeroen van de Ven & Marie Claire Villeval, 2024. "Selective Information Sharing and Group Delusion," Working Papers 2405, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    14. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," SciencePo Working papers Main hal-03770685, HAL.
    15. 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).
    16. 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.
    17. Flores, Lia Q. & Fonseca, Miguel A., 2024. "Do in-group biases lead to overconfidence in performance? Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 111(C).

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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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