Title : DO SELF-THEORIES ON INTELLIGENCE EXPLAIN OVERCONFIDENCE AND RISK TAKING? A Field Experiment.
Author(s) : Bertrand Koebel, André Schmitt, Sandrine Spaeter
Abstract : Self-theories deal with how an individual perceives some of her attributes such as intelligence. People endorse basically one of two theories: growth mindset people think that intelligence can be developed (incremental theory) whereas fixed mindset people believe that intelligence is a fixed trait (entity theory). These theories play an important role on motivation and achievement as shown by Carol Dweck’s life-long research. They also impact self-assessment accuracy since fixed mindsets are much more imprecise in estimating their own ability. In behavioral economics, overconfidence is shown to play an important role in individual’s preferences and choices. In this paper, we conducted a field experiment to investigate whether self-theories impact overconfidence. Early career Vietnamese executives pursuing an MBA were incentivized. Our sample of managers and professionals controls for a wide range of corporate and demographic variables. The main result of our paper is that self-theories impact overconfidence when taking into account income. As in previous studies, we also find that subjects exhibit significant absolute overconfidence. Gender does not have any impact on overconfidence. We also tested the relationships between self-theories and risk taking.
Key-words : self-theories; overconfidence; experiment; mindset; risk-taking.
JEL Classification : C93, D81.
