CeDEx Brown Bag Seminar - Xue Wang

Title: Choosing to self-promote: Theory and Experiment

Abstract: Self-promotion, a form of expressed self-evaluation motivated by potential benefit, is common in the workplace. Given its importance for labour market outcomes, the decision-making process is not fully explored. This project aims to explore how agent makes self-promoting decisions given different compensation rules for her self-promotion. In particular, how the agent reacts with the skepticism on her self-promotion. We build the individual decision model for self-promotion with a linear payment rule,  and derive different responses to a drop in payment based on different modelling of lying cost. The role of motivated beliefs in the decision process is also discussed. To test the main predictions from theory, we design a lab experiment where we ask subjects to report their performance from a test given the payment rule depending on their reports. By varying the parameters in the payment rule and giving subjects additional information on average ability, we can identify the model that explains self-promotion better.