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The Process of Self-Discovery: Learned Helplessness, Self-Efficacy, and Endogenous Overoptimism

44 Pages Posted: 24 Apr 2016 Last revised: 15 Jul 2016

Derek Lemoine

University of Arizona - Department of Economics

Date Written: July 1, 2016

Abstract

I study the origin of people's beliefs about their own abilities, emphasizing the feedback loop between beliefs, effort, and outcomes. Consistent with the modern understanding of depression, I show that agents who are either more pessimistic about their own talent or less sure of their own talent are more prone to low-effort traps. I also show that a principal (such as a parent or manager) does not want an agent (such as a child or employee) to hold beliefs about his own talent that match the principal's beliefs; instead, the principal would like to make the agent overoptimistic and overly uncertain. These results are consistent with empirical findings from the psychology literature about the origin and evolution of children's beliefs, about the importance of self-efficacy beliefs for performance, and about the prevalence of overconfidence.

Keywords: talent, ability, learning, overconfidence, overoptimism, learned helplessness, depression, pessimism, optimism, effort, parenting, therapy

JEL Classification: D13, D83, I21, J13

Suggested Citation

Lemoine, Derek, The Process of Self-Discovery: Learned Helplessness, Self-Efficacy, and Endogenous Overoptimism (July 1, 2016). Available at SSRN: https://ssrn.com/abstract=2768511

Derek Lemoine (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

HOME PAGE: http://www.dereklemoine.com/

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