Overconfidence is one of the most ubiquitous cognitive bias. There is copious evidence of overconfidence being relevant in a diverse set of economic domains. In this paper, we relate the recent concept of cognitive uncertainty with overconfidence. Cognitive uncertainty represents a decision...

Many papers have reported behavioral biases in belief formation that come on top of standard game-theoretic reasoning. We show that the processes involved depend on the way participants reason about their beliefs. When they think about what everybody else or another "unspeci fied" individual is...

In order to help understand adherence to moral standards and the force of intrinsic motivation, we present an infinite-horizon model where an individual receives random temptations (such as bribe offers) and must decide which to resist. Temptations yield consumption value, but keeping a good...