Overconfidence can improve an agent's relative and absolute performance in contests

Sandra Ludwig; Philipp C. Wichardt; Hanke Wickhorst

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.

MoreLess

Year of publication:	2010
Authors:	Ludwig, Sandra ; Wichardt, Philipp C. ; Wickhorst, Hanke
Publisher:	München : Univ., Volkswirtschaftliche Fak.
Subject:	Overconfidence \| Contests \| Vertrauen \| Confidence \| Persönlichkeitspsychologie \| Personality psychology \| Wettbewerb \| Competition \| Arbeitsleistung \| Job performance \| Extensives Spiel \| Extensive form game \| Theorie \| Theory