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Power and overconfident decision-making

Author

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  • Fast, Nathanael J.
  • Sivanathan, Niro
  • Mayer, Nicole D.
  • Galinsky, Adam D.

Abstract

Five experiments demonstrate that experiencing power leads to overconfident decision-making. Using multiple instantiations of power, including an episodic recall task (Experiments 1–3), a measure of work-related power (Experiment 4), and assignment to high- and low-power roles (Experiment 5), power produced overconfident decisions that generated monetary losses for the powerful. The current findings, through both mediation and moderation, also highlight the central role that the sense of power plays in producing these decision-making tendencies. First, sense of power, but not mood, mediated the link between power and overconfidence (Experiment 3). Second, the link between power and overconfidence was severed when access to power was not salient to the powerful (Experiment 4) and when the powerful were made to feel personally incompetent in their domain of power (Experiment 5). These findings indicate that only when objective power leads people to feel subjectively powerful does it produce overconfident decision-making.

Suggested Citation

  • Fast, Nathanael J. & Sivanathan, Niro & Mayer, Nicole D. & Galinsky, Adam D., 2012. "Power and overconfident decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 117(2), pages 249-260.
  • Handle: RePEc:eee:jobhdp:v:117:y:2012:i:2:p:249-260
    DOI: 10.1016/j.obhdp.2011.11.009
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    References listed on IDEAS

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    Cited by:

    1. Brion, Sebastien & Anderson, Cameron, 2013. "The loss of power: How illusions of alliance contribute to powerholders’ downfall," Organizational Behavior and Human Decision Processes, Elsevier, vol. 121(1), pages 129-139.
    2. repec:eee:jobhdp:v:142:y:2017:i:c:p:28-44 is not listed on IDEAS
    3. Daly, Timothy M. & Nataraajan, Rajan, 2015. "Swapping bricks for clicks: Crowdsourcing longitudinal data on Amazon Turk," Journal of Business Research, Elsevier, vol. 68(12), pages 2603-2609.
    4. repec:eee:jobhdp:v:142:y:2017:i:c:p:45-57 is not listed on IDEAS
    5. Bohns, Vanessa K. & Newark, Daniel A. & Xu, Amy Z., 2016. "For a dollar, would you…? How (we think) money affects compliance with our requests," Organizational Behavior and Human Decision Processes, Elsevier, vol. 134(C), pages 45-62.
    6. Kausel, Edgar E. & Culbertson, Satoris S. & Leiva, Pedro I. & Slaughter, Jerel E. & Jackson, Alexander T., 2015. "Too arrogant for their own good? Why and when narcissists dismiss advice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 131(C), pages 33-50.
    7. Ling, Leng & Zhou, Xiaorong & Liang, Quanxi & Song, Pingping & Zeng, Haijian, 2016. "Political connections, overinvestments and firm performance: Evidence from Chinese listed real estate firms," Finance Research Letters, Elsevier, vol. 18(C), pages 328-333.

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