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Experimentation with Self-Serving Attribution Biases

Author

Listed:
  • Nina Hestermann
  • Yves Le Yaouanq

Abstract

We study an experimentation problem in a situation where the outcomes depend on the decision-maker's intrinsic ability and on an external variable. We analyze the mistakes made by individuals who hold inaccurate prior beliefs about their ability. Overconfident individuals take too much credit for their successes and excessively blame external factors if they fail. They are too easily dissatisfied with their environment, which leads them to experiment in variable environments and revise their self-confidence over time. In contrast, underconfident individuals might be trapped in low-quality environments and incur perpetual utility losses.

Suggested Citation

  • Nina Hestermann & Yves Le Yaouanq, 2021. "Experimentation with Self-Serving Attribution Biases," American Economic Journal: Microeconomics, American Economic Association, vol. 13(3), pages 198-237, August.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:3:p:198-237
    DOI: 10.1257/mic.20180326
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    Cited by:

    1. Deimen, Inga & Wirtz, Julia, 2022. "Control, cost, and confidence: Perseverance and procrastination in the face of failure," Games and Economic Behavior, Elsevier, vol. 134(C), pages 52-74.
    2. Nina Weber, 2023. "Experience of Social Mobility and Support for Redistribution: Accepting or Blaming the System?," ifo Working Paper Series 397, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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