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Self-Confidence And Social Interactions


  • Roland Benabou

    (Princeton University, NBER, CEPR and IRP)

  • Jean Tirole



This paper studies the interactions between an individual self-steem and his social environment, whether in the workplace, at school, or in personal relationships. A person generally has only imperfect knowledge of his own ability (or long-term pay) in pursuing a task, and will undertake it only if he has succinct self-confidence. People who interact with him (parent, spouse, friend, teacher, manager, colleague, etc.) often have complementary information about his ability, but also a vested interest in his completing the task. This generates an incentive for such principals to distort their signals so as to manipulate the agent?s self-confidence. We first study situations where an informed principal chooses an incentive structure, such as offering payments or rewards, delegating a task, or simply giving encouragement. We show that rewards may be weak reinforcers in the short term and that, as stressed by psychologists, they may have hidden costs in that they become negative reinforcers once withdrawn. By offering a low?powered incentive scheme, the principal signals that she trusts the agent. Conversely, rewards (extrinsic motivation) have a limited impact on the agent?s current performance, and reduce his intrinsic motivation to undertake similar tasks in the future. Similarly, empowering the agent is likely to increase his motivation and effort, while offers of help or assistance may create dependence. More generally, we identify under which conditions the hidden costs of rewards are a myth or a reality. We then consider the fact that people often criticize or downplay the achievements of their spouse, child, colleague, coauthor, subordinate or teammate. We formalize such situations of ego?bashing, and argue that they may reflect battles for dominance. By lowering the other?s ego, an individual may gain (or regain) real authority within the relationship. Finally, we turn to the case where it is the agent who has superior information, and may attempt to signal it through a variety of self?presentation strategies. In particular, people with low self?esteem often deprecate their own accomplishments in order to obtain leniency (a lowering of expectancies) or a ?helping hand?on various obligations. Such strategies are costly: they are met with disapproval, and may back?re if the desired indulgence is denied. We analyze this signaling game, and characterize the levels of self?esteem that give rise to self?deprecation.

Suggested Citation

  • Roland Benabou & Jean Tirole, 1999. "Self-Confidence And Social Interactions," Working Papers 151, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics.
  • Handle: RePEc:pri:wwseco:dp210.pdf

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    References listed on IDEAS

    1. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
    2. Jean-Jacques Laffont & Jean Tirole, 1988. "Repeated Auctions of Incentive Contracts, Investment, and Bidding Parity with an Application to Takeovers," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 516-537, Winter.
    3. R. Benabou & J. Tirole, 1999. "Self-Confidence: Intrapersonal Strategies," Princeton Economic Theory Papers 00s1, Economics Department, Princeton University.
    4. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-364, May.
    5. Juan D. Carrillo & Thomas Mariotti, 2000. "Strategic Ignorance as a Self-Disciplining Device," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 529-544.
    6. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
    7. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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    Cited by:

    1. Roland Benabou and Jean Tirole, 2004. "Willpower and Personal Rules," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 848-886, August.
    2. Jason M. Lindo & Nicholas J. Sanders & Philip Oreopoulos, 2010. "Ability, Gender, and Performance Standards: Evidence from Academic Probation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 95-117, April.
    3. Benedetto Gui, 2005. "Brennan, G. and Pettit, P.: The Economy of Esteem. An Essay on Civil and Political Society," Journal of Economics, Springer, vol. 86(2), pages 183-191, November.
    4. Ernst Fehr & Simon Gaechter, "undated". "Do Incentive Contracts Crowd out Voluntary Cooperation?," IEW - Working Papers 034, Institute for Empirical Research in Economics - University of Zurich.
    5. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    6. Sällström, Susanna & Sjogren, Anna, 2002. "Trapped, Delayed and Handicapped," CEPR Discussion Papers 3335, C.E.P.R. Discussion Papers.
    7. List, John A. & Rasul, Imran, 2011. "Field Experiments in Labor Economics," Handbook of Labor Economics, Elsevier.
    8. Aviad Heifetz & Chris Shannon & Yossi Spiegel, 2007. "The Dynamic Evolution of Preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(2), pages 251-286, August.
    9. Aubert, Cècile & Bardhan, Pranab & Dayton-Johnson, Jeff, 2003. "Artfilms, Handicrafts and Other Cultural Goods: The Case for Subsidy," Department of Economics, Working Paper Series qt62n4f3bh, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    10. D.Dragone, 2005. "Incoerenza Dinamica ed Autocontrollo: Proposta per un'Analisi Interdisciplinare," Working Papers 549, Dipartimento Scienze Economiche, Universita' di Bologna.
    11. Krähmer, Daniel, 2002. "Delegation versus authority
      [Delegation versus Autorität]
      ," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-26, Social Science Research Center Berlin (WZB).
    12. Bruno S. Frey & Reto Jegen, "undated". "Motivation Crowding Theory: A Survey Of Empirical Evidence, Revised Version," IEW - Working Papers 049, Institute for Empirical Research in Economics - University of Zurich.
    13. Aviad Heifetz & Yossi Spiegel, 2000. "On the Evolutionary Emergence of Optimism," Discussion Papers 1304, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    14. Neymotin, Florence, 2010. "Linking self-esteem with the tendency to engage in financial planning," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 996-1007, December.
    15. Marini, Annalisa, 2016. "Cultural Beliefs, Values and Economics: A Survey," MPRA Paper 69747, University Library of Munich, Germany.
    16. Judith Scott-Clayton & Lauren Schudde, 2016. "Performance Standards in Need-Based Student Aid," NBER Working Papers 22713, National Bureau of Economic Research, Inc.
    17. Boschini, Anne, 2003. "The impact of gender stereotypes on economic growth," Research Papers in Economics 2003:4, Stockholm University, Department of Economics.
    18. Kunz, Alexis H. & Pfaff, Dieter, 2002. "Agency theory, performance evaluation, and the hypothetical construct of intrinsic motivation," Accounting, Organizations and Society, Elsevier, vol. 27(3), pages 275-295, April.

    More about this item


    Selfconfidence; selfpresentation; motivation; rewards; incentives; standards; signaling; psychology and economics;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply


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