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, 2006). 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 of the overconfident agent in absolute terms.

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Year of publication:	2010
Authors:	Ludwig, Sandra ; Wichardt, Philipp C. ; Wickhorst, Hanke
Publisher:	Frankfurt a. M. : Verein für Socialpolitik
Subject:	Overconfidence \| Contests

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Series:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Principal Agent Problems ; G15-V1
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	654820627 [GVK] hdl:10419/37440 [Handle]
Classification:	D21 - Firm Behavior ; D44 - Auctions ; D82 - Asymmetric and Private Information
Source:	EconStor

Persistent link: https://www.econbiz.de/10010277216