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Overconfidence and excess entry: a comparison between students and managers

Author

Listed:
  • A. Felipe Rodrigues

    (Federal University of Santa Catarina)

  • Newton Da Costa

    (Federal University of Santa Catarina)

  • Sergio Da Silva

    (Federal University of Santa Catarina)

Abstract

Overconfidence can lead to excessive business entry. Here we replicate the pioneer experiment finding this nexus (Camerer and Lovallo 1999) and extend it in two major directions: (1) to consider managers as well as student subjects and (2) to explicitly take into account selected characteristics of the manager subjects. We find that managers are more prone to the nexus overconfidence-excess entry than students are. In particular, we find that left-handed, married, and emotionally aroused managers are more prone to excess entry.

Suggested Citation

  • A. Felipe Rodrigues & Newton Da Costa & Sergio Da Silva, 2011. "Overconfidence and excess entry: a comparison between students and managers," Economics Bulletin, AccessEcon, vol. 31(3), pages 2549-2557.
    • Handle: RePEc:ebl:ecbull:eb-11-00515
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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