Confidence-Enhanced Performance

Olivier Compte () and Andrew Postlewaite

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: There is ample evidence that emotions affect performance. Positive emotions can improve performance, while negative ones may diminish it. For example, the fears induced by the possibility of failure or of negative evaluations have physiological consequences (shaking, loss of concentration) that may impair performance in sports, on stage or at school. There is also ample evidence that individuals have distorted recollection of past events, and distorted attributions of the causes of successes of failures. Recollection of good events or successes is typically easier than recollection of bad ones or failures. Successes tend to be attributed to intrinsic aptitudes or own effort, while failures are attributed to bad luck. In addition, these attributions are often reversed when judging the performance of others. The objective of this paper is to incorporate the first phenomenon above into an otherwise standard decision theoretic model, and show that in a world where performance depends on emotions, biases in information processing enhance welfare.

Keywords: Confidence; Perception; Psychology (search for similar items in EconPapers)
JEL-codes: D8 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2001-05-01, Revised 2003-05-01
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-evo, nep-mic and nep-spo
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Confidence-Enhanced Performance (2004)
Working Paper: Confidence-Enhanced Performance (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:04-023

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