On the Positive Effects of Overcon fident Self-Perception in Teams
In this paper, we study the individual payoff effects of overconfident self-perception in teams. In particular, we demonstrate that the welfare of an overconfident agent in a team of one rational and one overconfident agent or a team of two overconfident agents can be higher than that of the members of a team of two rational agents. This result holds irrespective of the assumption about the agents' awareness of their colleague's bias. Moreover, we show that an overcondent agent is always better of when he is unaware of a potential bias of his colleague.
|Date of creation:||Apr 2011|
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- Miguel Costa-Gomes & Vincent P. Crawford & Bruno Broseta, .
"Cognition and Behavior in Normal-Form Games:An Experimental Study,"
00/45, Department of Economics, University of York.
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- Broseta, Bruno & Costa-Gomes, Miguel & Crawford, Vincent P., 2000. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt0fp8278k, Department of Economics, UC San Diego.
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- de la Rosa, Leonidas Enrique, 2011.
"Overconfidence and moral hazard,"
Games and Economic Behavior,
Elsevier, vol. 73(2), pages 429-451.
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