A Simple Model of Self-Assessments
Tinbergen Institute Discussion Paper No. 2006-010/1
25 Pages Posted: 23 Jan 2006
Date Written: January 17, 2006
We develop a simple model that describes individuals' self-assessments of their abilities. We assume that individuals learn about their abilities from appraisals of others and experience. Our model predicts that if communication is imperfect, then (i) appraisals of others tend to be too positive, and (ii) overconfidence leading to too much activism is more likely than underconfidence leading to too much passivity. The predictions of our model are consistent with findings in the social psychological literature.
Keywords: self-assessments, learning about ability, coaching, overconfidence, underconfidence
JEL Classification: D81, D82, D83
Suggested Citation: Suggested Citation