Overconfidence in Economic Contests

This paper studies an economic contest with two participants, who have overconfidence in their own relative abilities. We examine two different sources of overconfidence, overestimation of one's own ability and underestimation of the rival's ability, and compare the behavioral consequences of each situation with the correctly estimated case. The main result is that the former always induces the participants' aggressive behavior, while the latter does not.

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Year of publication:	2004-08-11
Authors:	Ando, Munetomo
Institutions:	Econometric Society
Subject:	Overconfidence \| economic contest \| relative ability \| all-pay auction

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Extent:	application/pdf
Series:	Econometric Society 2004 Far Eastern Meetings.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series Econometric Society Far Eastern Meetings 2004 Number 708
Classification:	D - Microeconomics ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005063739