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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Keywords coaching, learning about ability, overconfidence, self-assessments, underconfidence
JEL Criteria for Decision-Making under Risk and Uncertainty (jel D81), Asymmetric and Private Information (jel D82), Search; Learning; Information and Knowledge (jel D83)
Persistent URL dx.doi.org/10.1111/j.1468-0297.2009.02266.x, hdl.handle.net/1765/22266
Journal The Economic Journal
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