Self-confidence, Overconfidence and Prenatal Testosterone Exposure: Evidence from the Lab.

Patricio S Dalton,Sayantan Ghosal

doi:10.3389/fnbeh.2018.00005

Patricio S Dalton, Sayantan Ghosal

Open Access

https://doi.org/10.3389/fnbeh.2018.00005

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Abstract

This paper examines whether foetal testosterone exposure predicts the extent of confidence and over-confidence in own absolute ability in adulthood. To study this question, we elicited incentive-compatible measures of confidence and over-confidence in the lab and correlate them with measures of right hand 2D:4D, used as as a marker for the strength of prenatal testosterone exposure. We provide evidence that men with higher prenatal testosterone exposure (i.e., low 2D:4D ratio) are less likely to set unrealistically high expectations about their own performance. This in turn helps them to gain higher monetary rewards. Men exposed to low prenatal testosterone levels, instead, set unrealistically high expectations which results in self-defeating behavior.

Highlights

Self-confidence and overconfidence play a crucial role in people’s decisions and welfare
We address this question by examining whether prenatal testosterone exposure determines people’s confidence and overconfidence about their own ability to perform a rather unfamiliar and challenging task1
Self-Confidence and Prenatal Testosterone Exposure In Table 5 we report the results of a linear regression analysis examining the relation between our measure of self-confidence and the digit ratio19

Summary

Introduction

Self-confidence and overconfidence play a crucial role in people’s decisions and welfare. While positive thinking can enhance motivation and improve performance, being overly confident— i.e., believing one is better than one is—can be self-defeating (Benabou and Tirole, 2002). Overconfidence bias has been used to explain phenomena such as business failures (Camerer and Lovallo, 1999), stock market bubbles and excessively frequent trading (Barber and Odean, 2001; Grinblatt and Keloharju, 2009). An important question that arises is what determines the level of self-confidence and overconfidence. It is known that nurture does play a role. Mastering own experiences and observing successful experiences of similar others can influence people’s confidence (Bandura, 1977).

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