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Confidence and Career Choices: An Experiment

Kai Barron () and Christina Gravert

No 169, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Confidence is often seen as the key to success. Empirical evidence about how such beliefs about one\'s abilities causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one\'s own ability on two central choices made by workers in the labor market: choosing between jobs with different incentive schemes, and the subsequent choice of how much effort to exert within the job. An exogenous increase in confidence leads to an increase in subjects\' propensity to choose payment schemes that depend heavily on ability. This is detrimental for low ability workers. Policy implications are discussed.

Keywords: overconfidence; experiment; beliefs; real-effort; career choices (search for similar items in EconPapers)
JEL-codes: C91 D03 M50 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-hrm and nep-lma
Date: 2019-07-30
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Related works:
Working Paper: Confidence and career choices: An experiment (2019) Downloads
Working Paper: Confidence and Career Choices: An Experiment (2018) Downloads
Working Paper: Confidence and career choices: An experiment (2018)
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