This paper suggests a potential rationale for the recent empirical finding that overconfident agents tend to self-select into more competitive environments (e.g. Dohmen and Falk, forthcoming). In particular, it shows that moderate overconfidence in a contest can improve the agent's performance...

This paper compares two prominent empirical measures of individual risk attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire advocated by Dohmen, Falk, Huffman, Schupp, Sunde and Wagner (forthcoming) - with respect to (a) their within-subject stability over...

This paper reconsiders the valuation equilibrium concept (Jehiel and Samet, 2007) and proposes an additional regularity condition concerning the players' equilibrium strategies. The condition, which requires equilibrium strategies to induce the same local behaviour at all nodes with 'similar'...

It is a well known fact that for any finite extensive form game G there is a strategy profile σ which, together with an appropriate system of beliefs μ, constitutes a sequential equilibrium of G (Kreps and Wilson, 1982). However, as we demonstrate in this paper, there are sequential equilibria...

In this paper, we study the individual payoff effects of overconfident self-perception in teams. In particular, we demonstrate that the welfare of an overconfident agent in a team of one rational and one overconfident agent or a team of two overconfident agents can be higher than that of the...

This paper considers the effects of an interim performance evaluation on the decision of a principal to delegate authority to a potentially biased but better informed agent. Assuming the agents' outside option to be determined by market beliefs about their type, interim evaluations (a) provide a...

How do people trade off efficiency against equality concerns? To study this question, we conducted a modified mini ultimatum game (N=120) in which proposers were asked to choose between offering 8:2 and y:y, y∈{5, 4.5, 4,.., 0.5}; all offers in Euro. According to the data, 58 of 60 proposers...