Abstract
We conducted an experiment to compare how overconfidence is influenced by performance-based and fixed payment schemes. Participants in the experiment were students prior to taking a final exam in Introduction to Microeconomics. We find that most participants were overconfident regarding their success on the exam, overestimating the number of questions they would answer correctly. When a fixed pay scheme was used, men were more overconfident than women. Performance-based pay increased the overconfidence of women, and decreased the overconfidence of men. As a result, no gender difference in overconfidence was found when pay is based on performance.
Original language | English |
---|---|
Pages (from-to) | 30-36 |
Number of pages | 7 |
Journal | Economics Bulletin |
Volume | 35 |
Issue number | 1 |
State | Published - 2015 |
Externally published | Yes |