Looking at the bright side : the motivation value of overconfidence / Si Chen (Bonn Graduate School of Economics), Hannah Schildberg-Hörisch (Düsseldorf Institute for Competition Economics and IZA) ; IZA Institute of Labor Economics
VerfasserChen, Si ; Schildberg-Hörisch, Hannah
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, May 2018
Elektronische Ressource
Umfang1 Online-Ressource (40 Seiten) : Diagramme
SerieDiscussion paper ; no. 11564
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Looking at the bright side [1.31 mb]
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The motivation value of confidence postulates that individual effort provision is increasing in beliefs on ones own productivity. This relationship also holds for overconfident individuals who have exaggerated productivity beliefs (motivation value of overconfidence). We present first empirical evidence on the existence of a motivation value of absolute overconfidence that many microeconomic models build on. Moreover, we document that debiasing information increases the accuracy of productivity beliefs of overconfident individuals but comes at the cost of diminished effort provision - a result that is of obvious relevance for many contexts such as labor relations or learning at school. As a further conceptual contribution, we offer a novel strategy for identifying significant overconfidence at the individual level.