A Simple Model of Self-Assessment
The Economic Journal , Volume 119 - Issue 539 p. 1225- 1241
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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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