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, 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.

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Year of publication:	2010
Authors:	Ludwig, Sandra ; Wichardt, Philipp C. ; Wickhorst, Hanke
Publisher:	München : Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
Subject:	Vertrauen \| Persönlichkeitspsychologie \| Wettbewerb \| Arbeitsleistung \| Extensives Spiel \| Theorie \| Overconfidence \| Contests

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Series:	Munich Discussion Paper ; 2010-35
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.5282/ubm/epub.11885 [DOI] 641686323 [GVK] hdl:10419/104303 [Handle] RePEc:lmu:muenec:11885 [RePEc]
Classification:	D21 - Firm Behavior ; D44 - Auctions ; D82 - Asymmetric and Private Information
Source:	EconStor

Persistent link: https://www.econbiz.de/10010427565