Shame, Guilt and Self-Confidence: an Economic Analysis

2019-05-27

SpeakerRoberta Dessi

Time: 10:00am, Friday, May 31,2019

SiteEMS A208

Host: Li Xiaoqi

Abstract: The evidence from anthropology, psychology and economics shows that sensitivity to the emotion of shame varies across cultures. So does the tendency to exhibit overconfidence. This paper explores the connection between these two observations. It also sheds light on the, related, role of the sensitivity to guilt. Shame and guilt have been portrayed as alternative mechanisms to enforce cooperation. We focus on a key difference between shame and guilt: shame is less sensitive to an individual’s private information, making it a rather blunt instrument, while guilt is more vulnerable to manipulation by the self (e.g. excuses, selective attention, exploiting moral wiggle room…). Shame and guilt influence individual behaviour in a variety of dimensions, including their effect on individuals’ incentives to pursue long-term goals and invest in new projects. Taking this into account, we investigate how reliance on guilt versus shame interacts with a different psychological incentive mechanism: overconfidence. We investigate our model’s predictions using data on differences in self-confidence and in shame and guilt sensitivity across countries, as well as individual-level data on migrants.

Introduction to the Speaker

Roberta Dessi is currently Associate Professor of Economics at the Toulouse School of Economics, and Research Fellow at the Centre for Economic Policy Research (CEPR) in London. She received her PhD in Economics from the University of Cambridge. Professor Dessi's research interests are mainly in the areas of Corporate Finance (Venture Capital and Innovation), Industrial Organisation, Behavioral and Experimental Economics. Her work has been published in leading economics journals, such as American Economic Review, Economic Journal, RAND Journal of EconomicsEuropean Economic ReviewJournal of Economics and Management Strategy Journal of Economic Behavior and Organizationetc.