“Managing Expectations: When is it Profitable to Under-report Competence?” (with Rene Lindstaedt) [PDF]

Popular accounts of politics commonly relate stories of candidates, elected officials and bureaucrats appearing to undersell their competence. Insofar as individuals typically construct images of high quality, it is puzzling when people report an expected performance level below what they think is possible. We call this behavior the downward management of expectations. The standard explanation of the practice is that people are trying to hedge against the negative consequences of unanticipated failures and take advantage of unexpected successes. Taken to its logical extreme, the argument suggests that individuals should always manage expectations downward. Quite obviously, however, people do not always undersell their abilities and some even appear to report quality above what they believe to be true. In this paper, we develop a model of strategic communication designed to identify the conditions under which the downward management of expectations is profitable or even possible. We identify empirical implications and consider how the downward management of expectations appears in a number of substantive literatures.