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A Simple Model of Self-Assessment

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  • Silvia Dominguez-Martinez
  • OttoH. Swank

Abstract

We develop a simple model that describes individuals' self-assessments of their abilities. We assume that individuals learn about their abilities from appraisals of others and experience. Our model predicts that if communication is imperfect, then ("i") appraisals of others tend to be too positive and ("ii") overconfidence leading to too much activism is more likely than underconfidence leading to too much passivity. The predictions of our model are consistent with findings in the social psychological literature. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Suggested Citation

  • Silvia Dominguez-Martinez & OttoH. Swank, 2009. "A Simple Model of Self-Assessment," Economic Journal, Royal Economic Society, vol. 119(539), pages 1225-1241, July.
    • Handle: RePEc:ecj:econjl:v:119:y:2009:i:539:p:1225-1241
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    References listed on IDEAS

    as
    1. Roland Bénabou & Jean Tirole, 2005. "Self-Confidence and Personal Motivation," International Economic Association Series, in: Bina Agarwal & Alessandro Vercelli (ed.), Psychology, Rationality and Economic Behaviour, chapter 2, pages 19-57, Palgrave Macmillan.
    2. Fang, Hanming & Moscarini, Giuseppe, 2005. "Morale hazard," Journal of Monetary Economics, Elsevier, vol. 52(4), pages 749-777, May.
    3. Eric Van den Steen, 2004. "Rational Overoptimism (and Other Biases)," American Economic Review, American Economic Association, vol. 94(4), pages 1141-1151, September.
    4. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(3), pages 489-520.
    5. Mathias Dewatripont & Jean Tirole, 2005. "Modes of Communication," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1217-1238, December.
    6. Olivier Compte & Andrew Postlewaite, 2004. "Confidence-Enhanced Performance," American Economic Review, American Economic Association, vol. 94(5), pages 1536-1557, December.
    7. Carrillo, Juan & Brocas, Isabelle, 2002. "Are We All Better Drivers than Average? Self-Perception and Biased Behaviour," CEPR Discussion Papers 3603, C.E.P.R. Discussion Papers.
    8. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    9. Klar, Yechiel & Medding, Aviva & Sarel, Dan, 1996. "Nonunique Invulnerability: Singular versus Distributional Probabilities and Unrealistic Optimism in Comparative Risk Judgments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 67(2), pages 229-245, August.
    10. Hvide, Hans K., 2002. "Pragmatic beliefs and overconfidence," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 15-28, May.
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    Cited by:

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    2. Marco Percoco & Michele Giove, 2009. "Multilevel Governance at Work: Evidence from Structural Funds Management in Lombardia, Italy," Environment and Planning C, , vol. 27(3), pages 381-398, June.

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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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