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This paper introduces a tractable, structural model of subjective beliefs. Since agents that plan for the future care about expected future utility flows, current felicity can be increased by believing that better outcomes are more likely. On the other hand, expectations that are biased towards...
Persistent link: https://www.econbiz.de/10005329011
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 …
Persistent link: https://www.econbiz.de/10005063739
the number of trading partners. For the second case, we focus on over-confidence and note that its effects are ambiguous …: although over-confidence may lead agents to accept contracts they ought to reject, it actually reduces the private need to …
Persistent link: https://www.econbiz.de/10005699686