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A model of rational bias in self-assessments

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  • Ján Zábojník

Abstract

A body of empirical work documents that most people believe they are above average in a variety of skills and abilities. This paper argues that such evidence does not necessarily imply that people process information in an irrational way. I build a model in which people can learn about their abilities at a cost of foregone production. Individuals in this model keep testing their abilities until their self-assessments become favorable enough, at which point they stop. This way, a disproportionately large share of the population ends up with a high opinion about their abilities. Copyright Springer-Verlag Berlin/Heidelberg 2004

Suggested Citation

  • Ján Zábojník, 2004. "A model of rational bias in self-assessments," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(2), pages 259-282, January.
    • Handle: RePEc:spr:joecth:v:23:y:2004:i:2:p:259-282
    DOI: 10.1007/s00199-003-0382-3
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    Citations

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    Cited by:

    1. Maxime Menuet & Petros G. Sekeris, 2021. "Overconfidence and conflict," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1483-1499, October.
    2. Bobba, Matteo & Frisancho, Veronica, 2016. "Learning about Oneself: The Effects of Performance Feedback on School Choice," IZA Discussion Papers 10360, Institute of Labor Economics (IZA).
    3. Markus M. Möbius & Muriel Niederle & Paul Niehaus & Tanya S. Rosenblat, 2022. "Managing Self-Confidence: Theory and Experimental Evidence," Management Science, INFORMS, vol. 68(11), pages 7793-7817, November.
    4. Chen, Weiwei & Grove, Wayne A. & Hussey, Andrew, 2017. "The role of confidence and noncognitive skills for post-baccalaureate academic and labor market outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 10-29.
    5. Benoît, Jean-Pierre & Dubra, Juan, 2007. "Overconfidence?," MPRA Paper 6017, University Library of Munich, Germany, revised Nov 2007.
    6. Kim Gannon & Hanzhe Zhang, 2020. "An Evolutionary Justification for Overconfidence," Economics Bulletin, AccessEcon, vol. 40(3), pages 2494-2504.
    7. Bobba, Matteo & Frisancho, Veronica & Pariguana, Marco, 2016. "Perceived Ability and School Choices: Experimental Evidence and Scale-up Effects," TSE Working Papers 16-660, Toulouse School of Economics (TSE), revised Jul 2024.
    8. Hestermann, Nina & Le Yaouanq, Yves, 2018. "It\'s not my Fault! Self-Confidence and Experimentation," Rationality and Competition Discussion Paper Series 124, CRC TRR 190 Rationality and Competition.
    9. Francisco Silva, 2017. "Inducing Overconfidence," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 451-460, January.
    10. Edward D. Van Wesep, 2016. "The Quality of Expertise," Management Science, INFORMS, vol. 62(10), pages 2937-2951, October.
    11. Bunzel, Helle & Marcoul, Philippe, 2008. "Can racially unbiased police perpetuate long-run discrimination?," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 36-47, October.
    12. Hu Sun & Yun Wang, 2019. "Do On-lookers See Most of the Game? Evaluating Job-seekers' Competitiveness of Oneself versus of Others in a Labor Market Experiment," Working Papers 2019-07-11, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    13. Citci, Sadettin Haluk & Inci, Eren, 2016. "Career concerns and Bayesian overconfidence of managers," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 137-159.

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