Arbeitspapier

Persistent Overconfidence and Biased Memory: Evidence from Managers

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A long-standing puzzle is how overconfidence can persist in settings characterized by repeated feedback. This paper studies managers who participate repeatedly in a high-powered tournament incentive system, learning relative performance each time. Using reduced form and structural methods we find that: (i) managers make overconfident predictions about future performance; (ii) managers have overly-positive memories of past performance; (iii) the two phenomena are linked at an individual level. Our results are consistent with models of motivated beliefs in which individuals are motivated to distort memories of feedback and preserve unrealistic expectations.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 16283

Klassifikation
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Compensation Packages; Payment Methods
Firm Performance: Size, Diversification, and Scope
Retail and Wholesale Trade; e-Commerce
Personnel Economics: Compensation and Compensation Methods and Their Effects
Personnel Economics: Labor Management
Thema
overconfidence
memory
tournament
motivated beliefs

Ereignis
Geistige Schöpfung
(wer)
Huffman, David B.
Raymond, Collin
Shvets, Julia
Ereignis
Veröffentlichung
(wer)
Institute of Labor Economics (IZA)
(wo)
Bonn
(wann)
2023

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Original beim Datenpartner anzeigen

Objekttyp

  • Arbeitspapier

Beteiligte

  • Huffman, David B.
  • Raymond, Collin
  • Shvets, Julia
  • Institute of Labor Economics (IZA)

Entstanden

  • 2023

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