Confidence and career choices: An experiment

Arbeitspapier

Confidence in one's own abilities is often seen as an important determinant of being successful. Empirical evidence about how such beliefs about one's own abilities causally influence choices is, however, sparse. In this paper, we use a stylized laboratory experiment to investigate the causal effect of an increase in confidence on two important choices made by workers in the labor market: (i) choosing between jobs with a payment scheme that depends heavily on ability [high earnings risk] and those that pay a fixed wage [low earnings risk], and (ii) the subsequent choice of how much effort to exert within the job. We find that an exogenous increase in confidence leads to an increase in subjects' propensity to choose payment schemes that depend heavily on ability. This is detrimental for low ability workers due to high baseline levels of confidence.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2018-301r2

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Personnel Economics: General ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: overconfidence ; experiment ; beliefs ; real-effort ; career choices

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Barron, Kai ; Gravert, Christina
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/221821
• Last update: 10.03.2025, 11:42 AM CET