Deception and Self-Deception

39 Pages Posted: 19 Feb 2016 Last revised: 30 Apr 2018

See all articles by Peter Schwardmann

Peter Schwardmann

Ludwig Maximilian University of Munich (LMU)

Joel J. van der Weele

University of Amsterdam - Center for Experimental Economics and political Decision making (CREED); Tinbergen Institute; Center for Financial Studies (CFS)

Date Written: February 19, 2016

Abstract

Why are people so often overconfident? We conduct an experiment to test the hypothesis that people become overconfident to more effectively persuade or deceive others. After performing a cognitively challenging task, half of our subjects are informed that they can earn money by convincing others of their superior performance. The privately elicited beliefs of informed subjects display significantly more overconfidence than the beliefs of subjects in the control condition. Generating exogenous variation in confidence with a noisy performance signal, we also show that higher confidence indeed makes subjects more persuasive in the subsequent face-to-face interactions.

Keywords: overconfidence, belief formation, self-deception, deception

JEL Classification: C91, D03, D83

Suggested Citation

Schwardmann, Peter and van der Weele, Joel J., Deception and Self-Deception (February 19, 2016). Available at SSRN: https://ssrn.com/abstract=2734736 or http://dx.doi.org/10.2139/ssrn.2734736

Peter Schwardmann

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Joel J. Van der Weele (Contact Author)

University of Amsterdam - Center for Experimental Economics and political Decision making (CREED) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

HOME PAGE: http://https://sites.google.com/site/joelvdweele/

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Center for Financial Studies (CFS) ( email )

GrĂ¼neburgplatz 1
Frankfurt am Main, 60323
Germany

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