IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp11564.html
   My bibliography  Save this paper

Looking at the Bright Side: The Motivation Value of Overconfidence

Author

Listed:
  • Chen, Si

    () (Bonn Graduate School of Economics)

  • Schildberg-Hörisch, Hannah

    () (Heinrich Heine University Düsseldorf)

Abstract

The motivation value of confidence postulates that individual effort provision is increasing in beliefs on one's own productivity. This relationship also holds for overconfident individuals who have exaggerated productivity beliefs (motivation value of overconfidence). We present first empirical evidence on the existence of a motivation value of absolute overconfidence that many microeconomic models build on. Moreover, we document that debiasing information increases the accuracy of productivity beliefs of overconfident individuals but comes at the cost of diminished effort provision – a result that is of obvious relevance for many contexts such as labor relations or learning at school. As a further conceptual contribution, we offer a novel strategy for identifying significant overconfidence at the individual level.

Suggested Citation

  • Chen, Si & Schildberg-Hörisch, Hannah, 2018. "Looking at the Bright Side: The Motivation Value of Overconfidence," IZA Discussion Papers 11564, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11564
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp11564.pdf
    Download Restriction: no

    More about this item

    Keywords

    overconfidence; effort provision; laboratory experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    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:iza:izadps:dp11564. 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: (Mark Fallak). General contact details of provider: http://www.iza.org .

    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.

    We have no references for this item. You can help adding them by using 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.