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Confidence and career choices: An experiment

Kai Barron () and Christina Gravert

No SP II 2018-301, Discussion Papers, Research Unit: Economics of Change from WZB Berlin Social Science Center

Abstract: Confidence is often seen as the key to success. Empirical evidence about whether such beliefs 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. Using a hard-easy task manipulation to shift beliefs, we find that beliefs can be shifted, which in turn shifts decisions. In our setting, the beliefs of low ability individuals are more malleable than those of high ability individuals. Therefore, the treatment induces an increase in confidence and detrimental decision making by low ability workers but does not affect the outcomes of high ability workers. Men and women react similarly to the treatment. However, men hold higher baseline beliefs, implying that women make better incentive choice decisions. Policy implications regarding pre-labor market confidence development by means of feedback and grade inflation are discussed.

Keywords: overconfidence; experiment; beliefs; real-effort; grade inflation (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-exp and nep-lma
Date: 2018
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Working Paper: Confidence and career choices: An experiment (2019) Downloads
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