Ego Utility , Overconfidence , and Task Choice

@inproceedings{Kszegi2006EgoU,
  title={Ego Utility , Overconfidence , and Task Choice},
  author={Botond K{\"o}szegi},
  year={2006}
}
This paper models behavior when a decision maker cares about and manages her self-image. In addition to having preferences over material outcomes, the agent derives “ego utility” from positive views about her ability to do well in a skill-sensitive, “ambitious,” task. Although she uses Bayes’ rule to update beliefs, she tends to become overconfident regarding which task is appropriate for her. If tasks are equally informative about ability, her task choice is also overconfident. If the… CONTINUE READING
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