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Psychology, Rationality and Economic Behaviour pp 19–57Cite as

Palgrave Macmillan

Self-Confidence and Personal Motivation

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Part of the book series: International Economic Association Series ((IEA))

Abstract

The maintenance and enhancement of self-esteem has always been identified as a fundamental human impulse. Philosophers, writers, educators and of course psychologists have all emphasized the crucial role played by self-image in motivation, affect and social interactions. The aim of this chapter is to bring these concerns into the realm of economic analysis, and show that this has important implications for how agents process information and make decisions. Conversely, the tools of economic modelling can help shed light on a number of apparently irrational behaviours documented by psychologists.

‘Believe what is in the line of your needs, for only by such belief is the need fulfilled… Have faith that you can successfully make it, and your feet are nerved to its accomplishment.’

(William James, Principles of Psychology)

‘I have done this, says my memory. I cannot have done that, says my pride, remaining inexorable. Finally-memory yields.’

(Friedrich Nietzsche, Beyond Good and Evil)

I had during many years followed the Golden Rule, namely, that whenever a published fact, a new observation or thought came across me, which was opposed to my general results, to make a memorandum of it without jail and at once; for I had found by experience that such (contrary and thus unwelcome) facts and thoughts were far more apt to escape from memory than favourable ones.’

(Charles Darwin in The Life of Charles Darwin, by Francis Darwin)

* Reprinted with the permission of the MIT Press from Quarterly Journal of Economics (2002), vol. 117(3), pp. 871–915. We are grateful for helpful comments and discussions to Dilip Abreu, Olivier Blanchard, Isabelle Brocas, Ed Glaeser, Dan Gilbert, Ian Jewitt, David Laibson, George Loewenstein, Andrew Postlewaite, Marek Pycia, Matt Rabin, Julio Rotemberg and three anonymous referees, as well as conference and seminar participants at Chicago, Columbia, Cornell, MIT, the NBER, Northwestern, NYU, the Oxford Young Economists’ Conference, the University of Pennsylvania, Princeton, Stanford, and Yale. Roland Bénabou gratefully acknowledges financial support from the National Science Foundation (SES-0096431).

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Author information

Authors and Affiliations

  1. Woodrow Wilson School, Princeton University, USA

    Roland Bénabou

  2. Institute of Industrial Economics, University of Toulouse, France

    Jean Tirole

Authors
  1. Roland Bénabou
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  2. Jean Tirole
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Editor information

Editors and Affiliations

  1. Institute of Economic Growth, University of Delhi, India

    Bina Agarwal

  2. University of Siena, Italy

    Alessandro Vercelli

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© 2005 International Economic Association

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Bénabou, R., Tirole, J. (2005). Self-Confidence and Personal Motivation. In: Agarwal, B., Vercelli, A. (eds) Psychology, Rationality and Economic Behaviour. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230522343_2

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