Sekeris, P., " Success, Learning, and Overconfidence in Elimination Contests"

Title: "Success, Learning, and Overconfidence in Elimination Contests"

Speaker: Associate Professor Petros G. Sekeris, TBS Education (Toulouse)

Host:  Assistant Professor Efthymios Athanasiou, Department of Economics, Athens University of Economics and Business

Room:  76, Patission Str., Antoniadou Wing, 3rd floor, Room A36

Abstract: The paper analyzes a two-stage elimination contest in which an overconfident newcomer, uncertain about his ability, sees his overconfidence bias evolving endogenously following an early success. A first stage win amplifies the newcomer’s overconfidence bias when his ex-ante probability of being high ability is low, and dampens it otherwise. Overconfidence can raise the newcomer’s equilibrium effort in both stages and thus increase his chance of winning the contest. The model clarifies when success feeds further overconfidence biases and helps explain why overconfident individuals often rise to the top in organizational or competitive environments.