Does Confidence Predict Out-of-Domain Effort?

Elena Prokudina, Luc Renneboog, Philippe Tobler

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Abstract

Predicting worker’s effort is important in many different areas, but is often
difficult. Using a laboratory experiment, we test the hypothesis that confidence,
i.e. the person-specific beliefs about her abilities, can be used as a generic proxy to predict future effort provision. We measure confidence in the domain of financial knowledge in three different ways (self-assessed knowledge, probability-based confidence, and incentive-compatible confidence) and find a positive relation with actual effort provision in an unrelated domain. Additional analysis shows that the findings are independent of a person’s traits such as gender, age, and nationality.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages29
Volume2015-055
Publication statusPublished - 23 Nov 2015

Publication series

NameCentER Discussion Paper
Volume2015-055

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Keywords

  • Real-effort task
  • financial literacy
  • overconfidence

Cite this

Prokudina, E., Renneboog, L., & Tobler, P. (2015). Does Confidence Predict Out-of-Domain Effort? (CentER Discussion Paper; Vol. 2015-055). Tilburg: CentER, Center for Economic Research.