Does Confidence Predict Out-of-Domain Effort?

Abstract

Predicting worker's e↵ort is important in many di↵erent areas, but is often di cult. Using a laboratory experiment, we test the hypothesis that confidence, i.e. the person-specific beliefs about her abilities, can be used as a generic proxy to predict future e↵ort provision. We measure confidence in the domain of financial knowledge in three di↵erent ways (self-assessed knowledge, probability-based confidence, and incentive-compatible confidence) and find a positive relation with actual e↵ort provision in an unrelated domain. Additional analysis shows that the findings are independent of a person's traits such as gender, age, and nationality.JEL Classification G11, J22