Let’s start with the premise that self-confidence leads to greater success. (Now, you may object because most of the highly self-confident people you know are not as good as they think they are. But the premise is simply that they are more successful than they would otherwise be, not that their self-confidence is fully validated.)
Is it because confidence by itself makes you more successful? You can do some interesting behavioral economics with that assumption but here’s another channel that requires less of a leap. When you are confident in yourself you try harder, you take more chances, you let your intuitions run. But that by itself doesn’t make you any more successful than the next guy. Indeed it probably will make you less successful because your intuitions are probably wrong.
But it means that you will find that out sooner. And if you are confident enough, when your first foray fails you will believe in yourself enough to regroup and try again. Even if your confidence doesn’t make it any more likely that these successive attempts pay off, you will still be more successful in the long run because you will learn faster what doesn’t work, and those lessons won’t demoralize you.
And once we have this, then it follows that confidence per se can make you more successful. Because confidence signals this ability to roll with the punches and that will be rewarded by others.
Cheap Talk 
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June 5, 2011 at 11:58 pm
Nageeb Ali
As to whether confidence is beneficial from the perspective of experimentation depends on your underlying type (parallel to how confidence may / may not be beneficial when someone is learning self-control). If one is the type for whom some strategy works, then it is better to be confident as you say. But if one’s type is such that all strategies are doomed, it’s better to give up from the very beginning.
Of course, experimentation can have social benefits even when it fails (insofar as others may learn). So I can see why you may wish to convince others that confidence can make them successful.
June 7, 2011 at 9:15 am
jeff
An interesting question is when you want to make your children more confident.
June 14, 2011 at 12:26 am
Nageeb Ali
I think of encouraging confidence as being similar to the Rayo-Robson paper that we saw at USC: it’s all about teaching children the “right beliefs” to have. I’m trying to make my daughter a bit less confident when she seems to think that she is impervious to injuries that come from diving off furniture several times her height into a wooden floor (she isn’t from Krypton). On the other hand, when it comes time for children to learn how to ride a bike, children may wrongly attribute the effortless balance to intrinsic type rather than experience. So one needs to give them confidence so as to experiment and learn what we adults know to be the truth.
June 6, 2011 at 6:07 am
Heski
To the extent that people know their own abilities better than others then self-confidence might reflect ability to that others.
So more able = (on average) more able. I guess not all that interesting.
Slightly more interesting. If others’ responses affect success probabilities then even controlling for ability, you might observe more self-confident people being more successful.
How I’m perceived by others –> the way they treat me –> my probability of success
and if they infer something about my ability from my self-confidence this leads to success.
I think that there’s something to this – Nadal succeeds not only in how he plays but how others respond and his reputation is certainly intimidating …
The story I had in my head when I was writing my 03 paper (which had the much better title “self-confidence and survival” until it got to the refereeing process …) was that of Philip Schofield. A kids tv presenter in the UK well-known by a certain generation who famously got his break by writing to the BBC every week until they gave him an interview.
Of course such a theory (as all signalling theories) rely on some kind of self-knowledge (or at least that people have better information about themselves than others). Not crazy inasmuch as I spend more time with myself than anyone else … but I may not be able to benchmark very well and so this underlying assumption may be problematic (see the 2000 Psychology Ignobel prize).
Moreover just Nageeb’s critique applies here as well. In the theory I’m outlining, it’s important that the actions that others take when they think I’m good make it more likely for me to succeed (conceivably there are counter-examples – maybe others raise their game but the Tiger Woods economics papers I think back up my perspective in sports?)
June 7, 2011 at 9:19 am
jeff
heski, intuitively the strategic response is important but is there a theory of that which doesn’t jump straight into psychology? I mean its one thing to say that I get intimidated when you are in the audience and that gets me flustered even before you ask a question. But is there something more? Does Nadal’s reputation cause Federer to change strategies in a way that benefits the former?
June 13, 2011 at 12:41 pm
Heski
Not sure I was thinking about Federer, but rather guys ranked 200 in the world who might just be thinking that they’re better off saving their energy for another day (that’s how I undertood Jen Brown’s paper). This surely benefits Nadal, and for the guy ranked 200 it’s not obvious that this has to do with psychology? (though you could surely spin a psychological story about damaging his own ego). As you know, I have only a nodding acquaintance with actually playing sports so it’s hard for me to tell how big a deal it is to save oneself from making a big push.
I guess the concern that you have is that you have a reputation for playing a certain way then I should only change the way I play if it helps me win and you lose? Instead I have in mind a model where I rationally conserve energy for other times.
June 13, 2011 at 12:55 pm
Heski
Same idea …. the opponent, other responder, might rather just not get into an argument in the first place! (and I already might be regretting this one).
When you ask a question in a seminar and ask it with confidence, a speaker might concede simply to avoid looking like more of an idiot or say “that’s genius but I’ll have to think about it more after the talk” and you look even smarter (for some people that is “success” in seminar participation).
Instead when I ask a question, the speaker might either think about it and give a nuanced answer that shows the question was not fully thought out.