Overconfidence Can Improve an Agent's Relative and Absolute Performance in Contests
This paper suggests a potential rationale for the recent empirical finding that overconfident agents tend to self-select into more competitive environments (e.g. Dohmen and Falk, forthcoming). In particular, it shows that moderate overconfidence in a contest can improve the agent's performance relative to an unbiased opponent and can even lead to an advantage for the overconfident agent in absolute terms.
|Date of creation:||05 Jul 2010|
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- Bjorn Bartling & Ernst Fehr & Michel Andre Marechal & Daniel Schunk, 2009. "Egalitarianism and Competitiveness," American Economic Review, American Economic Association, vol. 99(2), pages 93-98, May.
- Luís Santos-Pinto, 2010.
"Positive Self-Image In Tournaments,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(2), pages 475-496, 05.
- Munetomo Ando, 2004. "Overconfidence in Economic Contests," Econometric Society 2004 Far Eastern Meetings 708, Econometric Society.
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