Self-Confidence and Personal Motivation

We analyze the value placed by rational agents on self-con�dence, and the strategies employed in its pursuit. Con�dence in one’s abilities generally enhances motivation, making it a valuable asset for individuals with imperfect willpower. This demand for self-serving beliefs (which can also arise from hedonic or signaling motives) must be weighed against the risks of overcon�dence. On the supply side, we develop a model of self-deception through endogenous memory that reconciles the motivated and rational features of human cognition. The resulting intrapersonal game of strategic communication typically leads to multiple equilibria. While “positive thinking ” can improve welfare, it can also be self-defeating (and nonetheless pursued). Believe what is in the line of your needs, for only by such belief is the need ful�lled... 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 fail 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 favorable ones [Charles Darwin in The Life of Charles Darwin, by Francis