Strategically delusional
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Strategically delusional Alice Soldà1,2,3 · Changxia Ke3 · Lionel Page4 · William von Hippel5 Received: 12 February 2019 / Revised: 21 November 2019 / Accepted: 26 November 2019 © Economic Science Association 2019
Abstract We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. To address this question, we design an experiment in which participants are incentivized either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results show that participants are more likely to (1) overestimate their performance when they anticipate that they will try to persuade others and (2) bias their information search in a manner conducive to receiving more positive feedback, when given the chance to do so. In addition, we also find suggestive evidence that this increase in confidence has a positive effect on participants’ persuasiveness. Keywords Overconfidence · Motivated cognition · Self-deception · Persuasion · Information sampling · Experiment JEL Classification C91 · D03 · D83 Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1068 3-019-09636-9) contains supplementary material, which is available to authorized users. * Alice Soldà [email protected]‑heidelberg.de Changxia Ke [email protected] Lionel Page [email protected] William von Hippel [email protected] 1
Heidelberg University, Heidelberg, Germany
2
Univ Lyon, Université Lyon 2, GATE UMR 5824, 93 Chemin des Mouilles, 69130 Ecully, France
3
Queensland University of Technology, Brisbane, Australia
4
University of Technology Sydney, Sydney, Australia
5
University of Queensland, Brisbane, Australia
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A. Soldà et al.
1 Introduction For a long time, most standard theories in economics (Von Neumann and Morgenstern 1953) and psychology (Maslow 1950; Körding and Wolpert 2004) have assumed that people collect and process information in a way that gives them an accurate perception of reality. But empirical research has shown that most people are actually overconfident regarding their own abilities. They believe that they are more skilled, more attractive, and in better health than others (Svenson 1981; Gabriel et al. 1994; Weinstein 1980; Epley and Whitchurch 2008). This overconfidence occupies a particular place in the collection of behavioural biases. The widespread presence of inflated self-beliefs presents an instance where people are not just making random mistakes, it appears instead as a systematic tendency to venture in self-serving delusions. Many psychological studies have suggested that overconfidence arises because it has a consumption value (Taylor and Brown 1988): people enjoy basking in the belief that they are better than they actually are. However, miscalibrated beliefs have a cost. The perception of our own abilities/attributes influences
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