Can an Overconfident Employee be an Asset to a Company?

Andres Espitia

Is it always detrimental to a firm if an employee is overconfident? In this video, ANDRES ESPITIA studies overconfidence and presents some scenarios in which it can be of benefit. Espitia makes use of a game theoretic model and outlines case studies involving a nuclear power plant employee concerned with safety and a human resource manager responsible for performance based reward. The study finds that overconfidence may be an asset when firms require employees to react to evidence in an extreme manner, where a muted response is detrimental. The model developed for this project opens the way for further research on belief based biases. Ongoing work will also explore the effects of managerial efforts to promote or restrict overconfidence.

DOI:

https://doi.org/10.21036/LTPUB101152

Researcher

Andres Felipe Espitia de la Hoz is a postdoctoral researcher in the Institute for Microeconomics at the University of Bonn. Having achieved an MSc degree at the London School of Economics (2015), Espitia completed his PhD research at Northwestern University (2022). His main research interests include microeconomic theory, behavioral economics and organizational economics. A native of Columbia, courses taught by Espitia at the University of Bonn include Topics in Microeconomic Theory and Behavioral Economics.

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn)

Bonn is one of the large universities in Germany, with around 36,000 students, 550 professors, 6,500 other staff staff. It offers a wide disciplinary spectrum comprising some 200 different degree programmes, from Agricultural Science to Tibetan Studies. This diversity is what characterizes Bonn as a full-range university with a strong international orientation. In many international university rankings Bonn is placed among the 100 best universities in the world.Its academic and research profile features internationally renowned specializations in the fields of Mathematics, Physics/Astronomy, Economics, Chemistry, Pharma Research, Biosciences, Genetic Medicine, Neurosciences and Philosophy/Ethics. Other disciplines, such as Geography and Law, are of outstanding importance within the German research scene. The Rheinische Friedrich-Wilhelms-Universität Bonn is rooted in a long tradition going back almost 200 years. It was founded in 1818 by Friedrich-Wilhelm III, the Prussian king whose name it bears. Imbued with the spirit of Wilhelm von Humboldt, the university quickly joined the circle of Germany's most distinguished universities and became a major pole of attraction for leading scholars as well as students.The list of famous professors ranges from the astronomer Friedrich Wilhelm Argelander (1799-1875), through the chemist August Kekulé von Stradonitz (1829–1896) and political economist Josef Schumpeter (1883–1950) to the philologist Ernst Robert Curtius (1886–1956) and the theologists Karl Barth (1886–1968) and Joseph Ratzinger (born 1927), now Pope Benedict XVI. Bonn's best-known students include Heinrich Heine, Karl Marx, Friedrich Nietzsche, and Konrad Adenauer. The university is proud of a long list of award-winning scientists and scholars, with about twenty Leibniz Prize winners and around thirty ERC grantees. In the last three decades two professors have received the Nobel Prize: Wolfgang Paul (for Physics, 1989) and Reinhard Selten (for Economics, 1994). (Source: University of Bonn)

Can an Overconfident Employee be an Asset to a Company?

Researcher

Original Publication

Confidence and Organizations