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Self-Confidence & Social Interactions


  • Bénabou, Roland
  • Tirole, Jean


This paper studies the interactions between an individual's self-esteem and his social environment - in the workplace, at school, and in personal relationships. Because a person generally has only imperfect knowledge of his own abilities, people who derive benefits from his performance (parent, spouse, friend, teacher, manager, etc.) have incentives to manipulate his self--confidence. We first study situations where an informed principal chooses an incentive structure, such as offering payments or rewards, delegating a task, or giving encouragement. We show that extrinsic rewards may have hidden costs - as stressed by psychologists - in that they undermine intrinsic motivation. As a result, they may be only weak reinforcers in the short run, and become negative reinforcers once withdrawn. Similarly, empowerment is likely to increase motivation, while offers of help may create a dependence. More generally, we identify when the hidden costs of rewards are a myth or a reality. We next consider situations where people criticize or downplay the performance of their spouse, child, colleague, or subordinate. We formalize ego-bashing as reflecting battles for dominance or authority within the relationship. Finally, we turn to the self-presentation strategies of privately informed agents. We study in particular how depressed individuals may engage in self-deprecation as a way of seeking leniency (a lowering of expectancies) or a ‘helping hand’ on various obligations.

Suggested Citation

  • Bénabou, Roland & Tirole, Jean, 2000. "Self-Confidence & Social Interactions," CEPR Discussion Papers 2579, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2579

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    References listed on IDEAS

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    Cited by:

    1. Benedetto Gui, 2005. "Brennan, G. and Pettit, P.: The Economy of Esteem. An Essay on Civil and Political Society," Journal of Economics, Springer, vol. 86(2), pages 183-191, November.
    2. Marini, Annalisa, 2016. "Cultural Beliefs, Values and Economics: A Survey," MPRA Paper 69747, University Library of Munich, Germany.
    3. Judith Scott-Clayton & Lauren Schudde, 2016. "Performance Standards in Need-Based Student Aid," NBER Working Papers 22713, National Bureau of Economic Research, Inc.

    More about this item


    Incentives; Motivation; Psychology and Economics; Rewards; Self-Confidence; Self-Presentation; Signalling; Standards;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence


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