Discussion Paper Details

Please find the details for DP8722 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Self-Esteem, Shame and Personal Motivation

Author(s): Roberta Dessí and Xiaojian Zhao

Publication Date: December 2011

Keyword(s): cultural transmission, overconfidence and shame

Programme Area(s): Industrial Organization

Abstract: Evidence from psychology suggests that overconfidence is more important in North America than in Japan. The pattern is reversed for shame, an emotion that appears to play a more important role among Japanese than North Americans. We develop a model that endogenizes these differences, building on a tradeoff between the benefits of encouraging self-improvement and the benefits of promoting initiative and new investments. Overconfidence and high sensitivity to shame emerge as substitute mechanisms to induce efficient decisions. We identify the key equilibrium costs as well as benefits of reliance on each mechanism, and the implications for welfare.

For full details and related downloads, please visit:

Bibliographic Reference

Dessí, R and Zhao, X. 2011. 'Self-Esteem, Shame and Personal Motivation'. London, Centre for Economic Policy Research.