Journal Article10.1162/JEEA.2006.4.4.673
Ego utility, overconfidence, and task choice
TL;DR: In this article, the authors model behavior when a decision maker cares about and manages her self-image and derive "ego utility" from positive views about her ability to do well in a skill-sensitive, "ambitious" task.
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Abstract: This paper models behavior when a decision maker cares about and manages her self-image. In addition to having preferences over material outcomes, the agent derives “ego utility” from positive views about her ability to do well in a skill-sensitive, “ambitious,” task. Although she uses Bayes’ rule to update beliefs, she tends to become overconfident regarding which task is appropriate for her. If tasks are equally informative about ability, her task choice is also overconfident. If the ambitious task is more informative about ability, she might initially display underconfidence in behavior, and, if she is disappointed by her performance, later become too ambitious. People with ego utility prefer to acquire free information in smaller pieces. Applications to employee motivation and other economic settings are discussed. (JEL: D83, D11)
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Citations
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Ego-utility and Endogenous Information Acquisition; An Experimental Study
TL;DR: In this article, the authors examine endogenous decisions to acquire useful information and find that for the subjects making sub-optimal decisions, aversion to cognitive dissonance is the prevalent channel, while the availability of information alone does not automatically lead to an improvement in decisions.
Self-signaling in voting
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Overconfidence and risk dispersion
TL;DR: In this article, the authors present a simple principal-agent model in which the principal's interest in dispersing risk motivates him to hire overconfident agents, and they show that induced overconfidence satisfies experimental stylized facts (such as, hard-easy effect, false certainty effect and underuse of base rates).
Contracting With Self-Esteem Concerns
TL;DR: In this paper, self-esteem concerns are incorporated into an otherwise ordinary principal-agent framework and examined its impact on the optimal incentive scheme and the agent's behavior, especially focusing on a form of intrapersonal strategy known as self-handicapping.
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Advances In Experimental Social Psychology
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