American Economic Review: Vol. 95 No. 5 (December 2005)
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A Model of Positive Self-Image in Subjective Assessments
Santos-Pinto, Luís, and Joel Sobel. 2005. "A Model of Positive Self-Image in Subjective Assessments." American Economic Review, 95(5): 1386-1402.
This paper suggests a mechanism that describes individuals' positive self-image in subjective assessments of their relative abilities. The mechanism assumes individuals have heterogeneous production functions that determine ability as a function of multiple skills; make skill-enhancing investments with the goal of maximizing their ability; and make ability comparisons using their own production function. Within this framework, the paper provides conditions under which there is positive self-image. Positive self-image is increasing in the ease of the task, the number of different skills needed for the task, and the variability of production technologies in the population.
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