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Under- versus overconfidence: an experiment on how others perceive a biased self-assessment

Published online by Cambridge University Press:  14 March 2025

Carmen Thoma
Carmen Thoma*
Affiliation:
Ludwig-Maximilians-Universität (University of Munich), Munich, Germany
*
carmen.thoma@gmail.com
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Abstract

This paper reports findings of a laboratory experiment, which explores how reported self-assessment regarding the own relative performance is perceived by others. In particular, I investigate whether overconfident or underconfident subjects are considered as more likeable, and who of the two is expected to win in a tournament, thereby controlling for performance. Underconfidence beats overconfidence in both respects. Underconfident subjects are rewarded significantly more often than overconfident subjects, and are significantly more often expected to win. Subjects being less convinced of their performance are taken as more congenial and are expected to be more ambitious to improve, whereas overconfident subjects are rather expected to rest on their high beliefs. While subjects do not anticipate the stronger performance signal of underconfidence, they anticipate its higher sympathy value. The comparison to a non-strategic setting shows that men strategically deflate their self-assessment to be rewarded by others. Women, in contrast, either do not deflate their self-assessment or do so even in non-strategic situations, a behavior that might be driven by non-monetary image concerns of women.

Keywords

Self-assessmentOverconfidenceSignalingExperimentC91D03J16
Type
Original Paper
Information
Experimental Economics , Volume 19 , Issue 1 , March 2016 , pp. 218 - 239
Copyright
Copyright © 2015 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-015-9435-2) contains supplementary material, which is available to authorized users.

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