Julia Shvets

Persistent overconfidence and biased memory

Julia Shvets is currently working on a rich dataset on managers in a large chain of food and drink stores, a project generously supported by the Keynes Fund. It combines observational data on multiple dimensions of managerial performance with the data on characteristics and behaviors of these managers collected through a series of laboratory experiments with them. In one paper from this project, with David Huffman and Collin Raymond, Ms Shvets looks at a long-standing puzzle of whether and how overconfidence can persist when people get repeated feedback on their performance. The paper looks at the managers who participate repeatedly in a high-powered tournament incentive system, learning relative performance each time. Using both reduced form and structural methods the researchers find that: 1) managers make overconfident predictions about future performance; 2) managers have overly-positive memories of past performance; 3) the two phenomena are linked at an individual level in a way consistent with models of motivated beliefs (such as Benabou and Tirole 2002): managers appear to use selective memory to maintain an unrealistically high self-image.

Ms Shvets’ current research agenda is to better understand people’s non-monetary motivations, including concerns about their rank vis-à-vis others. Her other long standing interest, following earlier work with Toke Aidt, is agenda setting in committee decisions making. Her published work using newly collected datasets include papers on decisions of Russian judges and behavior of American state legislators (with Toke Aidt).

Juli Shvets is an applied microeconomist and a Senior College Lecturer (with tenure) at Christ’s College, University of Cambridge. She was previously a Policy Analyst at RECEP (Russian European Centre for Economics Policy) in Moscow and an Analyst at IDEAglobal in London and New York. She holds a PhD in Economics from the London School of Economics, an MSc and Diploma in Economics, also from LSE and a BA in Business Administration from Auburn University, Alabama.