Self-Esteem, Shame and Personal Motivation
Roberta Dessi and
Xiaojian Zhao ()
No 639, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse
The available evidence from numerous studies in psychology suggests that overconfidence is a much more important phenomenon in North America than in Japan. Relatedly, North Americans appear to view high self-esteem much more positively than Japanese. The pattern is reversed when it comes to shame, a social emotion which appears to play a much more important role among Japanese than North Americans. We develop an economic model that endogenizes these observed differences, and relates them to differences in the economic and social environment. A crucial tradeoff arises in the model between the benefits of encouraging self-improvement and the benefits of promoting initiative and new investments. In this context, self-esteem maintenance (self-enhancement) and high sensitivity to shame emerge as substitute mechanisms to induce efficient effort and investment decisions, generating a \North American" equilibrium with overconfidence and low sensitivity to shame, and a \Japanese" equilibrium with high sensitivity to shame and no overconfidence. The analysis identifies the key equilibrium costs as well as the benefits of reliance on each mechanism, and the implications for welfare.
Keywords: Overconfidence; shame; cultural transmission (search for similar items in EconPapers)
JEL-codes: D82 D83 Z13 (search for similar items in EconPapers)
Date: 2011-11, Revised 2013-12
New Economics Papers: this item is included in nep-cbe, nep-neu and nep-soc
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Working Paper: Self-Esteem, Shame and Personal Motivation (2013)
Working Paper: Self-Esteem, Shame and Personal Motivation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ide:wpaper:23207
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