Does overconfidence promote cooperation? Theory and experimental evidence

Xile Yin, Jianbiao Li and Te Bao

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2019, vol. 79, issue C, 119-133

Abstract: This paper explores the potential “bright side” of overconfidence. We examine the effects of two types of overconfidence—overestimation and overprecision—on the contribution to the public good in a two-person threshold public good game. Experimental results show that the influence of overconfidence on contribution in public goods crucially depends on the agents’ type of preferences. Overestimation leads to a higher contribution by conditional cooperators, but a lower contribution by free-riders. Overprecision, in general, leads to a higher contribution by conditional cooperators, but has little effect on the contribution of free-riders.

Keywords: Overconfidence; Overestimation; Overprecision; Heterogeneous preferences; Threshold public good game (search for similar items in EconPapers)
JEL-codes: C92 D64 H41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:79:y:2019:i:c:p:119-133

DOI: 10.1016/j.socec.2019.02.008

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