IDEAS home Printed from https://ideas.repec.org/p/cvs/starer/99-10.html
   My bibliography  Save this paper

Overconfidence in Search

Author

Listed:
  • Dubra, J.

Abstract

In a standard search model I relax the assumption that agents know the distribution of offers and characterize the behavioral and welfare consequences of overconfidence. Optimistic individuals search longer if they are equally stubborn and high offers are good news. Otherwise, the pessimists search longer. The welfare of unbiased individuals is larger than that of overconfident decision makers if the latter's biases are large and searchers stubborn. Otherwise, the overconfident may be better off. Finally, I give a testable implication of overconfidence and discuss applications and policy issues.

Suggested Citation

  • Dubra, J., 1999. "Overconfidence in Search," Working Papers 99-10, C.V. Starr Center for Applied Economics, New York University.
  • Handle: RePEc:cvs:starer:99-10
    as

    Download full text from publisher

    File URL: http://econ.as.nyu.edu/docs/IO/9186/RR99-10.PDF
    Download Restriction: no

    References listed on IDEAS

    as
    1. Terrance Odean, 1998. "Volume, Volatility, Price, and Profit When All Traders Are Above Average," Journal of Finance, American Finance Association, vol. 53(6), pages 1887-1934, December.
    2. Beaudry, Paul & Portier, Franck, 2004. "An exploration into Pigou's theory of cycles," Journal of Monetary Economics, Elsevier, vol. 51(6), pages 1183-1216, September.
    3. Bikhchandani, Sushil & Sharma, Sunil, 1996. "Optimal search with learning," Journal of Economic Dynamics and Control, Elsevier, vol. 20(1-3), pages 333-359.
    4. Benos, Alexandros V., 1998. "Aggressiveness and survival of overconfident traders," Journal of Financial Markets, Elsevier, vol. 1(3-4), pages 353-383, September.
    5. Kohn, Meir G. & Shavell, Steven, 1974. "The theory of search," Journal of Economic Theory, Elsevier, vol. 9(2), pages 93-123, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Juan Dubra & Jean-Pierre Benoit, 2011. "The Problem of Prevention," Documentos de Trabajo/Working Papers 1111, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
    2. Diego García & Francesco Sangiorgi & Branko Urošević, 2007. "Overconfidence and Market Efficiency with Heterogeneous Agents," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(2), pages 313-336, February.
    3. Francesco Squintani, 1999. "On-the-Job Signaling and Self-Confidence," Discussion Papers 1274, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cvs:starer:99-10. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Stubing). General contact details of provider: http://edirc.repec.org/data/aenyuus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.