A Model of Rational Bias in Self-Assessments

Posted: 27 May 2003

See all articles by Jan Zabojnik

Jan Zabojnik

Queen's University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

A body of empirical work documents that most people believe they are above average in a variety of skills and abilities. This paper argues that such evidence does not necessarily imply that people process information in an irrational way. I build a model in which people can learn about their abilities at a cost of foregone production. Individuals in this model keep testing their abilities until their self-assessments become favorable enough, at which point they stop. This way, a disproportionately large share of the population ends up with a high opinion about their abilities.

Keywords: Bias in self-assessments, Overconfidence, Learning about ability

JEL Classification: D81, D83, J22, J29

Suggested Citation

Zabojnik, Jan, A Model of Rational Bias in Self-Assessments. Economic Theory, Forthcoming. Available at SSRN: https://ssrn.com/abstract=407180

Jan Zabojnik (Contact Author)

Queen's University - Department of Economics ( email )

94 University Avenue
Kingston, Ontario K7L 3N6
Canada
613-533-2275 (Phone)
613-533-6668 (Fax)

HOME PAGE: http://qed.econ.queensu.ca/faculty/zabojnik/Page/

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