We develop a simple model that describes individuals’ self-assessments of their abilities. We assume that individuals learn about their abilities from appraisals of others and experience. Our model predicts that if communication is imperfect, then (i) appraisals of others tend to be too positive and (ii) overconfidence leading to too much activism is more likely than underconfidence leading to too much passivity. The predictions of our model are consistent with findings in the social psychological literature.

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doi.org/10.1111/j.1468-0297.2009.02266.x, hdl.handle.net/1765/22266
The Economic Journal
Erasmus School of Economics

Swank, O.H, & Dominguez Martinez, S. (2009). A Simple Model of Self-Assessment. The Economic Journal, 119(539), 1225–1241. doi:10.1111/j.1468-0297.2009.02266.x