• Abstract and Figures
• Public Full-text

Repository. Research Institute University WP WP 3 3 2 European Institute. Cadmus, on University Psychology and Economics EUROPEAN UNIVERSITY INSTITUTE EUROPEAN UNIVERSITY Access and Interactions Social European Department of of Department Economies Open EIB LECTURE SERIES Self-Confidence Roland Bénabou Jean Tirole Jean Tirole Author(s). Available and The 2020. © in Library EUI the by produced version Digitised Repository. Research Institute University European Institute. European University Institute Cadmus, 3 on 0001 University 0034 Access European 2098 Open 3 Author(s). Available The 2020. © in Library EUI the by produced version Digitised Repository. Research Institute University European of this series. The Department of Economics is very grateful to the EIB for the endowment There are There twoare papers, from both of which Tirole Jean drew his lecture: This is the text of the third lecture of the European Investment Bank Lecture de de Toulouse, on 2000. January 18 Roland Roland Bénabou/Jean Tirole, Roland Bénabou/Jean Tirole, series, given by Tirole,Jean of the d'ÉconomieInstitut industrielle, Université Institute. Cadmus, on University PSYCHOLOGY AND ECONOMICS Access European Open Self-Confidence and Social Interactions. Self-Confidence: Intrapersonal Strategies; Jean Tirole Author(s). Available The 2020. © in Library EUI the by produced version Digitised Repository. Research Institute University European Institute. Cadmus, on University Access European Open Author(s). Available The 2020. © in Library EUI the by produced version Digitised Repository. Research Institute University European Institute. Cadmus, on University Access Psychology and Economics European Open EUROPEAN UNIVERSITY INSTITUTE and Social Interactions Department of Economies EIB LECTURE SERIES EIB LECTURE Self-Confidence Roland Bénahou Author(s). Available Jean Tirole Jean Tirole The and 2020. © in Library EUI the by produced version Digitised Repository. Research Institute University o v WP 3 3 2 EUf t European 0 Institute. P£O Cadmus, on University No of part this maypaper be reproduced in any form Access © 2000 Roland Benabou Tiroleand Jean European Open without permission of the authors. Printed Printed in Italy in October 2000 European University Institute I -I 50016 San Domenico (FI) All rights reserved. Author(s). Available Badia Fiesolana The 2020. Italy © in Library EUI the by produced version Digitised Repository. Research Institute University European CEPR, and MIT. Economics of Contracts”Pycia, (Brussels,Gérard NovemberRoland, 1999).Julio Rotemberg, and participants at the Franqui conference on “The Institute. 3IDEI and GREMAQ2Princeton (UMRUniversity, 5604 NBER,CNRS), CEPR Toulouse, and IRP.CERAS (URA 2036 CNRS), Paris, 'We are grateful for helpful comments and discussions to Isabelle Brocas, Robert Lane, Marek Cadmus, on AND SOCIAL INTERACTIONS University Access Roland Bénabou2 Jean Tirole3 SELF-CONFIDENCE European Open This Version: December 1999 First Version: June 1999 Author(s). Available The 2020. © in Library EUI the by 1 produced version Digitised Repository. Research A bstract This paper studies the interactions between an individual’s self-esteem and his social environ­ Institute ment, whether in the workplace, at school, or in personal relationships. A person generally has only imperfect knowledge of his own ability (or long-term payoff) in pursuing a task, and will undertake it only if he has sufficient self-confidence. People who interact with him (parent, spouse, friend, teacher, manager, colleague, etc.) often have complementary information about University his ability, but also a vested interest in his completing the task. This generates an incentive for such principals to distort their signals so as to manipulate the agent’s self-confidence. We first study situations where an informed principal chooses an incentive structure, such as European offering payments or rewards, delegating a task, or simply giving encouragement. We show that rewards may be weak reinforcers in the short term and that, as stressed by psychologists, they Institute. may have hidden costs in that they become negative reinforcers once withdrawn. By offering Cadmus, a low-powered incentive scheme, the principal signals that she trusts the agent. Conversely, on rewards (extrinsic motivation) have a limited impact on the agent’s current performance, and University reduce his intrinsic motivation to undertake similar tasks in the future. Similarly, empowering the agent is likely to increase his motivation and effort, while offers of help or assistance may Access create a dépendance. More generally, we identify under which conditions the hidden costs of European rewards are a myth or a reality. Open We then consider the fact that people often criticize or downplay the achievements of their spouse, child, colleague, coauthor, subordinate or teammate. We formalize such situations of Author(s). ego-bashing, and argue that they may reflect battles for dominance. By lowering the other’s ego, Available an individual may gain (or regain) real authority within the relationship. The Finally, we turn to the case where it is the agent who has superior information, and may 2020. © attempt to signal it through a variety of self-presentation strategies. In particular, people in with low self-esteem often deprecate their own accomplishments in order to obtain leniency (a lowering of expectancies) or a “helping hand” on various obligations. Such strategies are costly: Library they are met with disapproval, and may backfire if the desired indulgence is denied. We analyze this signalling game, and characterize the levels of self-esteem that give rise to self-deprecation. EUI the Keywords: self-confidence, self-presentation, motivation, rewards, incentives, standards, sig­ by nalling, psychology and economics. JEL Classification: A12, C70, DIO, D60, J22, J24, J53. produced version Digitised Repository. 1 Introduction Research Should a child be rewarded for passing an exam? What impact do performance bonuses, monitoring or empowerment have on employees’ morale and productivity? What are the Institute costs and benefits of standards and expectancies? How can depressive subjects react negatively to information favorable to their self-esteem while simultaneously seeking help from others in costly fashions? These questions are approached in this paper from a University unifying perspective which emphasizes the interaction between an individual’s self-esteem, his self-presentation strategies, and his environment. The first premise of our analysis is that people have imperfect knowledge of their own abilities in many of the tasks they face. We therefore study decision-making by an European agent (child, student, employee, etc.; “he”) who faces uncertainty about his payoffs from Institute. pursuing a ceratin course of action. The unknown variable could be a characteristic of the individual himself, such as his talent, of the specific task at hand (long-run return, Cadmus, how difficult or enjoyable it is to complete, etc.), or of the match between the two. In on presenting the model we shall generally emphasize the case of unknown ability, which University corresponds most closely to the intuitive notion of self-confidence; but it will be clear Access from the analysis that all three are formally equivalent. Second, we adopt a cognitive approach, assuming that the individual is an informa­ European Open tion processor who extracts from his environment signals that are relevant for his self- confidence.1 We in fact focus on the polar case where individuals are fully rational and Bayesian; although people surely make mistakes in processing information, we want to Author(s). account for the fact that they cannot systematically and repeatedly fool themselves, or Available others for that matter. The 2020. Third, self-knowledge is relevant to the extent that, in most tasks, ability and effort © in are complementary factors in the production of performance.2 Thus, an agent undertakes an activity only if he has sufficient self-confidence in his ability to succeed. Because of this complementarity, people interacting with this individual and having Library a stake in his action have an incentive to manipulate information relevant to his self- EUI knowledge. Thus, in much of the paper, a principal (parent, spouse, friend, teacher, the 1 In section 3.3 we will compare this approach to a more behaviorist rendition of social interactions. by 2There are also instances of substitutability, and we shall consider them as well. W hat is essential for our argument is nonseparablility. produced version Digitised Repository. boss, colleague, etc.; “she”) has a vested interest in (derives a benefit from) the agent’s undertaking and succeeding in the activity. In other words, success generates a spillover Research or positive externality on the principal. In many circumstances, both the agent and the principal have private information Institute about the agent’s ability to perform the task. The agent usually has better access to memories of his previous performances and of the way these were accomplished (his effort intensity, the idiosyncratic random events facilitating or inhibiting performance). That is, the agent often has more factual information that is relevant to his self. University By contrast, the principal often has private complementary information about the task. For example, a teacher or manager has information about he difficulty of the subject or assignment which, together with the

Load more

  56

Copy Link