Overconfidence Increases Productivity

31 Pages Posted: 4 Aug 2011

See all articles by Yusuke Kinari

Yusuke Kinari

Kyushu University

Noriko Mizutani

Institute for Research on Household Economics

Fumio Ohtake

Osaka University - Center for Infectious Disease Education and Research

Hiroko Okudaira

Okayama University

Date Written: August 2, 2011

Abstract

Recent studies report that productivity increases under tournament reward structures than under piece rate reward structures. We conduct maze-solving experiments under both reward structures and reveal that overconfidence is a significant factor in increasing productivity. Specifically, subjects exhibiting progressively higher degrees of overconfidence solve more mazes. This result shows a positive aspect of overconfidence, which usually has been examined in its negative aspect as an expectation bias.

Keywords: expectation, overconfidence, reward structure, productivity, experiment

JEL Classification: C9, D03, J33

Suggested Citation

Kinari, Yusuke and Mizutani, Noriko and Ohtake, Fumio and Okudaira, Hiroko, Overconfidence Increases Productivity (August 2, 2011). ISER Discussion Paper No. 814, Available at SSRN: https://ssrn.com/abstract=1904692 or http://dx.doi.org/10.2139/ssrn.1904692

Yusuke Kinari (Contact Author)

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, Fukuoka 812-8581
Japan

Noriko Mizutani

Institute for Research on Household Economics ( email )

2-3-7, Kudan-kita
Chiyoda-ku
Tokyo, 102-0073
Japan

Fumio Ohtake

Osaka University - Center for Infectious Disease Education and Research ( email )

1-7 Machikaneyamacho
Toyonaka
Osaka, 560-0043
Japan

Hiroko Okudaira

Okayama University ( email )

2-1-1, Tsushimanaka, Okayama-shi
Okayama
Japan
+81-86-251-7542 (Phone)
+81-86-251-7542 (Fax)

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