Skill or Luck? Biases of Rational Agents
Name
Skill or Luck 4255-02.pdf
Size
481.94 KB
Format
Adobe PDF
Checksum (MD5)
29fbf853b05c3c45f1f9ee74d3814d45
Author(s)
Van den Steen, Eric
Date Issued
September 24, 2002
Series/Report no.
MIT Sloan School of Management Working Paper;4255-02
Abstract
This paper shows why, in a world with differing priors, rational agents tend to
attribute their own success more to skill and their failure more to bad luck than an
outsider. It further shows why each agent in a group might think he or she is the
best, why an agent might overestimate the control he has over the outcome, and why
two agents? estimated contributions often add up to more than 100%. Underlying
all these phenomena is a simple and robust mechanism that endogenously generates
overoptimism about one?s own actions. The paper also shows how these biases hinder
learning and discusses some implications for organizations.
Subjects
rational agents
heterogeneous priors
attribution and inference bias
behavioral bias
overconfidence
self-serving bias
Persistent DSpace Link
