eprintid: 16550
rev_number: 28
eprint_status: archive
userid: 1482
importid: 105
dir: disk0/00/01/65/50
datestamp: 2015-03-16 14:49:35
lastmod: 2024-04-18 11:51:13
status_changed: 2024-04-18 11:51:13
type: monograph
metadata_visibility: show
creators_name: Dessi, Roberta
creators_name: Zhao, Xiaojian
creators_idrefppn: 172136431
creators_affiliation: Toulouse School of Economics (GREMAQ and IDEI) and CEPR
creators_affiliation: Department of Economics, Hong Kong University of Science and Technology
title: Over-Confidence, Shame and Investments
ispublished: pub
subjects: subjects_ECO
abstract: The available evidence from numerous studies suggests that overconfidence is a more important phenomenon in North America than in Japan. The pattern is reversed for shame, which appears to play a more important role among Japanese than North Americans. We develop a model that endogenizes these differences and examines their economic consequences. In addition, it yields novel implications for differences in overconfidence and behavior within countries. A crucial tradeoff arises in the model between the benefits of encouraging improvement on existing activities and the benefits of promoting initiative and investment in new activities. Overconfidence and high sensitivity to shame emerge as substitute mechanisms to induce efficient investment decisions, generating a "North American" equilibrium with overconfidence and low sensitivity to shame, and a "Japanese" equilibrium with high sensitivity to shame and no overconfidence. The analysis identifies the costs as well as bene fits of reliance on each mechanism, and welfare implications.
date: 2014-08
date_type: published
publisher: TSE Working Paper
official_url: http://tse-fr.eu/pub/28397
faculty: tse
divisions: tse
keywords: Overconfidence
keywords: shame
keywords: investment
keywords: cultural differences
keywords: cross-sectional differences
keywords: memory
keywords: cultural transmission
language: en
has_fulltext: TRUE
subjectsJEL: JEL_D03
subjectsJEL: JEL_D83
subjectsJEL: JEL_Z1
view_date_year: 2014
full_text_status: public
monograph_type: working_paper
series: TSE Working Paper
volume: 14-516
place_of_pub: Toulouse
pages: 51
institution: Université Toulouse 1 Capitole
department: Toulouse School of Economics
book_title: TSE Working Paper
oai_identifier: oai:tse-fr.eu:28397
harvester_local_overwrite: oai_set
harvester_local_overwrite: faculty
harvester_local_overwrite: site
harvester_local_overwrite: department
harvester_local_overwrite: pages
harvester_local_overwrite: place_of_pub
harvester_local_overwrite: institution
harvester_local_overwrite: creators_idrefppn
oai_lastmod: 2024-04-17T14:52:31Z
oai_set: tse
oai_set: ut1c
site: ut1
citation:   Dessi, Roberta <https://www.idref.fr/172136431> and Zhao, Xiaojian  (2014) Over-Confidence, Shame and Investments.  TSE Working Paper, n. 14-516, Toulouse     
document_url: https://publications.ut-capitole.fr/id/eprint/16550/1/wp_tse_516.pdf