SBEE Lecture Series: Charles Bellemare
Ehrlicher Room, 3100 North Quad
The Social, Behavioral and Experimental Economics lecture series is sponsored by the School of Information, the Ross School of Business and the Department of Economics. Speakers from U.S. and international universities present their research at weekly seminars during the 2017-2018 academic year.
Responding to subjective evaluations: assessing the role of over-confidence, ego-threats, and monetary consequences using a field experiment in Denmark
We conduct an experiment to separate the driving forces underlying responses of agents to subjective evaluations provided by principals. The experiment exogenously varies the financial consequences of the evaluations for agents and whether agents can reward or punish principals for the evaluations received. Our design exploits a computerized task whose productivity is difficult to evaluate objectively by both agents and principals. True productivity and agent's evaluations of their own productivity are however observable in the data, allowing identification of over/underconfident agents. We use these data to estimate a model where reward and punishment behavior may depend on the desire to protect self-esteem, over/underconfidence, and reciprocity driven by the monetary consequences of the evaluations. We find significant interaction between own over/underconfidence and behavior -- over-confident agents engage in costly punishment when they receive evaluations below their own, but provide limited rewards when evaluations exceed their own. In contrast, under-confident agents weakly punish evaluations below their own, but reward significantly evaluations exceeding their own. Reciprocal responses are also found to be weakly related to the financial consequences of the evaluations. These results point towards a behavioral model of reciprocity that intertwines the desire to protect self-esteem with over/underconfidence.
Charles Bellemare is Professor of Economics at Laval University in Québec City. He holds a PhD in Economics from Tilburg University. He is a regular member of the Centre interuniversitaire sur le risque, les politiques économiques et l’emploi (CIRPÉE). His main research interests are in behavioral and experimental economics. Most of his recent work involves estimating structural models of individual behavior in principal-agent settings.