Measuring Responsiveness to Feedback as a Personal Trait
Tinbergen Institute Discussion Paper 16-043/I
29 Pages Posted: 4 Jun 2016
Date Written: June 2, 2016
People typically update their beliefs about their own abilities too little in response to feed- back, a phenomenon known as “conservatism”, and some studies suggest that they overweight good relative to bad signals (“asymmetry”). We measure individual conservatism and asymmetry in three tasks that test different cognitive skills, and study entry into a winner-takes-all competition based on similar skills. We show that individual differences in feedback responsiveness explain an important part of the variation in confidence and competition entry decisions. Conservatism is correlated across tasks and predicts competition entry both by influencing beliefs and independently of beliefs, suggesting it can be considered a personal trait. Subjects tend to be more conservative in tasks that they see as more ego-relevant and women are more conservative than men. Asymmetry is less stable across tasks, but predicts competition entry by increasing self-confidence.
Keywords: Bayesian updating, feedback, confidence, identity, competitive behavior
JEL Classification: C91, C93, D83
Suggested Citation: Suggested Citation