On the Positive Effects of Overconfident Self-Perception in Teams

24 Pages Posted: 29 May 2011

See all articles by Sandra Ludwig

Sandra Ludwig

Ludwig Maximilian University of Munich (LMU)

Philipp C. Wichardt

University of Rostock - Department of Economics

Hanke Wickhorst

University of Muenster - Münster School of Business and Economics

Date Written: May 27, 2011

Abstract

In this paper, we study the individual payoff effects of overconfident self-perception in teams. In particular, we demonstrate that the welfare of an overconfident agent in a team of one rational and one overconfident agent or a team of two overconfident agents can be higher than that of the members of a team of two rational agents. This result holds irrespective of the assumption about the agents’ awareness of their colleague’s bias. Moreover, we show that an overconfident agent is always better of when he is unaware of a potential bias of his colleague.

Keywords: Overconfidence, Team Production

JEL Classification: D21, D62, L23

Suggested Citation

Ludwig, Sandra and Wichardt, Philipp C. and Wickhorst, Hanke, On the Positive Effects of Overconfident Self-Perception in Teams (May 27, 2011). Available at SSRN: https://ssrn.com/abstract=1854465 or http://dx.doi.org/10.2139/ssrn.1854465

Sandra Ludwig

Ludwig Maximilian University of Munich (LMU) ( email )

Ulm University
Helmholtzstrasse 18
Ulm, Baden-Württemberg 89081
Germany

Philipp C. Wichardt (Contact Author)

University of Rostock - Department of Economics ( email )

Ulmenstr. 69
Rostock, 18057
Germany

Hanke Wickhorst

University of Muenster - Münster School of Business and Economics ( email )

Scharnhorststr. 100
48151 Munster
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
86
Abstract Views
721
rank
290,533
PlumX Metrics