When Overconfidence Is Revealed to Others: Testing the Status-Enhancement Theory of Overconfidence
Organizational Behavior and Human Decision Processes, 122 (2), 266-279, September 2013
Vanderbilt Owen Graduate School of Management Research Paper No. 2532697
14 Pages Posted: 4 Dec 2014
Date Written: 2013
The status-enhancement theory of overconfidence proposes that overconfidence pervades self-judgment because it helps people attain higher social status. Prior work has found that highly conﬁdent individuals attained higher status regardless of whether their conﬁdence was justified by actual ability (Anderson, Brion, Moore, & Kennedy, 2012). However, those initial ﬁndings were observed in contexts where individuals’ actual abilities were unlikely to be discovered by others. What happens to overconfident individuals when others learn how good they truly are at the task? If those individuals are penalized with status demotions, then the status costs might outweigh the status benefits of overconfidence – thereby casting doubt on the benefits of overconfidence. In three studies, we found that group members did not react negatively to individuals revealed as overconfident, and in fact still viewed them positively. Therefore, the status benefits of overconfidence outweighed any possible status costs, lending further support to the status-enhancement theory.
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