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Confidence and Career Choices: An Experiment

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  • Barron, Kai

    (WZB Berlin)

  • Gravert, Christina

    (University of Copenhagen)

Abstract

Confidence is often seen as the key to success. Empirical evidence about how such beliefs about one\'s abilities causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one\'s own ability on two central choices made by workers in the labor market: choosing between jobs with different incentive schemes, and the subsequent choice of how much effort to exert within the job. 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. Policy implications are discussed.

Suggested Citation

  • Barron, Kai & Gravert, Christina, 2019. "Confidence and Career Choices: An Experiment," Rationality and Competition Discussion Paper Series 169, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:169
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    Cited by:

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    2. Christopher Roth & Sonja Settele & Johannes Wohlfart, 2022. "Risk Exposure and Acquisition of Macroeconomic Information," American Economic Review: Insights, American Economic Association, vol. 4(1), pages 34-53, March.
    3. Manar Alnamlah & Christina Gravert, 2020. "She Could Not Agree More: The Role of Failure Attribution in Shaping the Gender Gap in Competition Persistence," CEBI working paper series 20-25, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    4. Murad, Zahra & Starmer, Chris, 2021. "Confidence snowballing and relative performance feedback," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 550-572.
    5. Yves Breitmoser & Lian Xue & Jiwei Zheng & Daniel John Zizzo, 2023. "Organizational Design and Error Propagation: Theory and Experiment," Discussion Papers Series 666, School of Economics, University of Queensland, Australia.

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    More about this item

    Keywords

    overconfidence; experiment; beliefs; real-effort; career choices;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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