Self-Esteem, Shame and Personal Motivation
The available evidence from numerous studies in psychology suggests that overconfidence is a much more important phenomenon in North America than in Japan. Relatedly, North Americans appear to view high self-esteem much more positively than Japanese. The pattern is reversed when it comes to shame, a social emotion which appears to play a much more important role among Japanese than North Americans. We develop an economic model that endogenizes these observed differences, and relates them to differences in the economic and social environment. A crucial tradeoff arises in the model between the benefits of encouraging self-improvement and the benefits of promoting initiative and new investments. In this context, self-esteem maintenance (self-enhancement) and high sensitivity to shame emerge as substitute mechanisms to induce efficient effort and investment decisions, generating a \North American" equilibrium with overconfidence and low sensitivity to shame, and a \Japanese" equilibrium with high sensitivity to shame and no overconfidence. The analysis identifies the key equilibrium costs as well as the benefits of reliance on each mechanism, and the implications for welfare.
|Date of creation:||Nov 2011|
|Date of revision:||Dec 2013|
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- Douglas Bernheim & Antonio Rangel, 2007.
"Beyond Revealed Preference Choice Theoretic Foundations for Behavioral Welfare Economics,"
07-031, Stanford Institute for Economic Policy Research.
- 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.
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- Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
- Wood, Stacy L & Lynch, John G, Jr, 2002. " Prior Knowledge and Complacency in New Product Learning," Journal of Consumer Research, Oxford University Press, vol. 29(3), pages 416-426, December.
- Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2010.
"Europe's tired, poor, huddled masses: Self-selection and economic outcomes in the age of mass migration,"
NBER Working Papers
15684, National Bureau of Economic Research, Inc.
- 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," American Economic Review, American Economic Association, vol. 102(5), pages 1832-1856, August.
- Ran Abramitzky & Leah Boustan & Katherine Eriksson, 2010. "Europe's Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration," Discussion Papers 09-029, Stanford Institute for Economic Policy Research.
- B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, Oxford University Press, vol. 124(1), pages 51-104.
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