Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2011-10-27
Number: 11-151/1
Author-Name: Gary Charness
Author-Workplace-Name: UCSB
Author-Name: Aldo Rustichini
Author-Workplace-Name: University of Minnesota
Author-Name: Jeroen van de Ven
Author-Workplace-Name: University of Amsterdam
Title: Self-Confidence and Strategic Deterrence
Abstract: We examine factors that may contribute to 'overconfidence'  in relative ability on an intelligence test. We test experimentally for evidence of self-esteem concerns and instrumental strategic concerns. Errors in Bayesian updating are rare when the information does not involve own relative ability, but far more common when it does, suggesting self-esteem issues. There is also strong evidence that males state higher levels of confidence in relative ability when this precedes a tournament; as entry is predicted by relative confidence, this can be an effective deterrent. Inflating confidence can be part of an equilibrium strategy, providing a rationale for strategic overconfidence.
Classification-JEL: A12, C91, D03, D82
Keywords: Self-confidence, overconfidence, strategic deterrence, unconscious behavior, selfdeception
File-Url: https://papers.tinbergen.nl/11151.pdf
File-Format: application/pdf
File-Size: 802014 bytes
Handle: RePEc:tin:wpaper:20110151