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Overconfidence Increases Productivity

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  • Yusuke Kinari
  • Noriko Mizutani
  • Fumio Ohtake
  • Hiroko Okudaira

Abstract

Recent studies report that productivity increases under tournament reward structures than under piece rate reward structures. We conduct maze-solving experiments under both reward structures and reveal that overconfidence is a significant factor in increasing productivity. Specifically, subjects exhibiting progressively higher degrees of overconfidence solve more mazes. This result shows a positive aspect of overconfidence, which usually has been examined in its negative aspect as an expectation bias.

Suggested Citation

  • Yusuke Kinari & Noriko Mizutani & Fumio Ohtake & Hiroko Okudaira, 2011. "Overconfidence Increases Productivity," ISER Discussion Paper 0814, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:0814
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2011/DP0814.pdf
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    References listed on IDEAS

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