Self-Esteem, Shame and Personal Motivation
Evidence from psychology suggests that overconfidence is more important in North America than in Japan. The pattern is reversed for shame, an emotion that appears to play a more important role among Japanese than North Americans. We develop a model that endogenizes these differences, building on a tradeoff between the benefits of encouraging self-improvement and the benefits of promoting initiative and new investments. Overconfidence and high sensitivity to shame emerge as substitute mechanisms to induce efficient decisions. We identify the key equilibrium costs as well as benefits of reliance on each mechanism, and the implications for welfare.
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- Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2012.
"Europe's Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration,"
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- B. Douglas Bernheim & Antonio Rangel, 2008.
"Beyond Revealed Preference: Choice Theoretic Foundations for Behavioral Welfare Economics,"
NBER Working Papers
13737, National Bureau of Economic Research, Inc.
- Douglas Bernheim & Antonio Rangel, 2007. "Beyond Revealed Preference Choice Theoretic Foundations for Behavioral Welfare Economics," Discussion Papers 07-031, Stanford Institute for Economic Policy Research.
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