Self-Confidence and Teamwork: An Experimental Test
Gate Working Paper No. 1126
55 Pages Posted: 14 Oct 2011
Date Written: September 2011
We use a laboratory experiment to study how perceptions of skill influence teamwork. Our design is based on Gervais and Goldstein (2007) theory of teams. Team output is increasing in skill and in effort, skill and effort are complements, and workers’ effort choices are complements. An overconfident agent thinks that his skill is higher than it actually is. We find that the presence of overconfident workers in teams is beneficial for firms since it raises effort provision and team output. We also find that overconfidence leads to a Pareto improvement in workers’ payoffs. In contrast, underconfidence is detrimental to firms as well as workers.
Keywords: teamwork, self-confidence, laboratory experiment
JEL Classification: D81, C91
Suggested Citation: Suggested Citation