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Self-Confidence: Intrapersonal Strategies

  • Roland Benabou

    (Princeton University, NBER, CEPR and IRP)

  • Jean Tirole


This paper analyzes the self-identification process and its role in motivation. We build a model of self-confidence where people have imperfect knowledge about their ability, which in most tasks is a complement to effort in determining performance. Higher self-confidence thus enhances motivation, and this creates incentives for the manipulation of self-perception. An individual suffering from time-inconsistency may thus want to enhance the self-confidence of his future selves, so as to limit their procrastination. The benefits of confidence-maintenance must, however, be traded off against the risks of overconfidence (inappropriate tasks being pursued). Moreover, rational inference implies that the individual cannot systematically fool himself. A first application of the model is self-handicapping: to avoid a negative inference about their ability, people may deliberately impair their performance, or choose overambitious tasks. Another application is selective memory or awareness management: people are (endogenously) more likely to remember or consciously acknowledge their successes than their failures. This, in turn, helps explain the widely documented prevalence of self–serving beliefs –that is, the fact that most people have overoptimistic assessments of their own abilities and other desirable traits. We analyze the workings of this psychological immune system and show that it typically leads to multiple equilibriums in cognitive strategies, self confidence, and behavior. Moreover, while active self-esteem maintenance can improve ex-ante welfare, it can also be self-defeating. Systematically looking on the bright side, avoiding negative thoughts and people, etc., can thus be beneficial in certain environments; but in other circumstances one can only lose by playing such games with oneself, and it would be better to always accept who you are and be honest with yourself.

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Paper provided by Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics. in its series Working Papers with number 152.

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Date of creation: Dec 1999
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Handle: RePEc:pri:wwseco:dp209
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  1. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
  2. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
  3. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, June.
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