Does Confidence Predict Out-of-Domain Effort?

CentER Discussion Paper Series No. 2015-055

29 Pages Posted: 24 Nov 2015

See all articles by Elena Pikulina

Elena Pikulina

University of British Columbia (UBC) - Division of Finance

Luc Renneboog

Tilburg University - Department of Finance; European Corporate Governance Institute (ECGI); Tilburg Law and Economics Center (TILEC)

Philippe Tobler

University of Zurich - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 23, 2015

Abstract

Predicting worker’s effort is important in many different areas, but is often difficult. Using a laboratory experiment, we test the hypothesis that confidence, i.e. the person-specific beliefs about her abilities, can be used as a generic proxy to predict future effort provision. We measure confidence in the domain of financial knowledge in three different ways (self-assessed knowledge, probability-based confidence, and incentive-compatible confidence) and find a positive relation with actual effort provision in an unrelated domain. Additional analysis shows that the findings are independent of a person’s traits such as gender, age, and nationality.

Keywords: Real-effort task, financial literacy, overconfidence

JEL Classification: G11, J22

Suggested Citation

Pikulina, Elena and Renneboog, Luc and Tobler, Philippe, Does Confidence Predict Out-of-Domain Effort? (November 23, 2015). CentER Discussion Paper Series No. 2015-055. Available at SSRN: https://ssrn.com/abstract=2694503 or http://dx.doi.org/10.2139/ssrn.2694503

Elena Pikulina (Contact Author)

University of British Columbia (UBC) - Division of Finance ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
6048223314 (Phone)

Luc Renneboog

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Warandelaan 2
5000 LE Tilburg
Netherlands
+13 31 466 8210 (Phone)
+13 31 466 2875 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Philippe Tobler

University of Zurich - Department of Economics ( email )

Zürich, CH-8006
Switzerland

Register to save articles to
your library

Register

Paper statistics

Downloads
31
Abstract Views
463
PlumX Metrics