Discussion Paper of the Institute for Organisational Economics 3/2010

On the Overconfidence-Effect in Teams
Hanke Wickhorst
December 2010



This paper analyses the effects of overconfidence on a coordination problem within a team of two agents and in the presence of effort complementarities. We show that in several settings an overconfidence bias or the mere anticipation of having an overconfident partner might not only help mitigate the coordination problem but also result in a Pareto improvement.