The Rodney L. White Center for Financial Research Overconfidence and Team Coordination
نویسندگان
چکیده
We model a team in which the marginal productivity of a player increases with the effort of other players on the team. Because the effort of each player is not observable to any other player, the performance of the team is negatively affected by a free-rider problem and by a lack of effort coordination across players. In this context, an overconfident player who overestimates her own marginal productivity works harder, thereby increasing the marginal productivity of her teammates who then work harder as well. This not only enhances team performance but may also create a Pareto improvement at the individual level. Indeed, although the overconfident player overworks, she benefits from the positive externality that other players working harder generates. Interestingly, the benefits of overconfidence may be long-lived even if players learn from team performance, as the overconfident player attributes the team’s success to her own ability, and not to the better coordination of the team. Because overconfidence naturally makes players work harder, monitoring, even when it is costless, may hurt the team by causing an overinvestment in effort.
منابع مشابه
The Rodney L. White Center for Financial Research The Effects of Biased Self-Perception in Teams
Several finance and economics problems involve a team of agents in which the marginal productivity of any one agent increases with the effort of others on the team. Because the effort of each agent is not observable to any other agent, the performance of the team is negatively affected by a free-rider problem and by a lack of effort coordination across agents. In this context, we show that an a...
متن کاملThe Rodney L. White Center for Financial Research Trading and Voting
The Rodney L. White Center for Financial Research is one of the oldest financial research centers in the country. It was founded in 1969 through a grant from Oppenheimer & Company in honor of its late partner, Rodney L. White. The Center receives support from its endowment and from annual contributions from its Members. The Center sponsors a wide range of financial research. It publishes a work...
متن کاملThe Rodney L. White Center for Financial Research Institutional Investors and Equity Prices
The Rodney L. White Center for Financial Research is one of the oldest financial research centers in the country. It was founded in 1969 through a grant from Oppenheimer & Company in honor of its late partner, Rodney L. White. The Center receives support from its endowment and from annual contributions from its Members. The Center sponsors a wide range of financial research. It publishes a work...
متن کاملThe Rodney L. White Center for Financial Research Hedge Funds: Pricing Controls and the Smoothing of Self Reported Returns
متن کامل
The Rodney L. White Center for Financial Research The Effect of Macroeconomic News on Beliefs and Preferences: Evidence from the Options Market
We examine the effect of regularly scheduled macroeconomic announcements on the beliefs and preferences of participants in the U.S. Treasury market by comparing the option-implied state-price density (SPD) of bond prices shortly before and after the announcements. We find that the announcements reduce the uncertainty implicit in the second moment of the SPD regardless of the content of the news...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2004