Overconfidence in Labor Markets

This chapter reviews how worker overconfidence affects labor markets. Evidence from psychology and economics shows that in many situations, most people tend to overestimate their absolute skills, overplace themselves relative to others, and overestimate the precision of their knowledge. The chapter starts by reviewing evidence for overconfidence and for how overconfidence affects economic choices. Next, it reviews economic explanations for overconfidence. After that, it discusses research on the impact of worker overconfidence on labor markets where wages are determined by bargaining between workers and firms. Here, three key questions are addressed. First, how does worker overconfidence affect effort provision for a fixed compensation scheme? Second, how should firms design compensation schemes when workers are overconfident? In particular, will a compensation scheme offered to an overconfident worker have higher-or lower-powered incentives than that offered to a worker with accurate self-perception? Third, can worker overconfidence lead to a Pareto improvement? The chapter continues by reviewing research on the impact of worker overconfidence on labor markets where workers can move between firms and where neither firms nor workers have discretion over wage setting. The chapter concludes with a summary of its main findings and a discussion of avenues for future research

An Extended Model of Moral Outrage at Corporate Social Irresponsibility

The final publication is available at Springer via http://dx.doi.org/ 10.1007/s10551-014-2487-

Validation of the theoretical domains framework for use in behaviour change and implementation research

Background An integrative theoretical framework, developed for cross-disciplinary implementation and other behaviour change research, has been applied across a wide range of clinical situations. This study tests the validity of this framework. Methods Validity was investigated by behavioural experts sorting 112 unique theoretical constructs using closed and open sort tasks. The extent of replication was tested by Discriminant Content Validation and Fuzzy Cluster Analysis. Results There was good support for a refinement of the framework comprising 14 domains of theoretical constructs (average silhouette value 0.29): 'Knowledge', 'Skills', 'Social/Professional Role and Identity', 'Beliefs about Capabilities', 'Optimism', 'Beliefs about Consequences', 'Reinforcement', 'Intentions', 'Goals', 'Memory, Attention and Decision Processes', 'Environmental Context and Resources', 'Social Influences', 'Emotions', and 'Behavioural Regulation'. Conclusions The refined Theoretical Domains Framework has a strengthened empirical base and provides a method for theoretically assessing implementation problems, as well as professional and other health-related behaviours as a basis for intervention development

Attitudes, efficacy beliefs, and willingness to pay for environmental protection when travelling

Environmental sustainability may be seen as a collective challenge that can only be met if a sufficient number of individuals cooperate. Whether or not individual tourists are willing to contribute their share may thus depend not only on the degree to which they think that environmental sustainability is important (attitudes), but also on the degree to which they think that other tourists hold similar attitudes (social comparison). Other possible influences are beliefs that one's own behaviour can make a difference (self-efficacy beliefs) and that tourists as a group together can make a difference (collective efficacy beliefs). This paper reports on findings from a study (N = 358) that investigated the role of these factors in explaining people's willingness to pay for environmental protection when travelling. Attitudes, self-efficacy and collective efficacy accounted for 30% of the variance in willingness to pay for environmental protection; social comparison did not explain additional variance. Theoretical and practical implications are discussed