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Schwardmann, Peter; van der Weele, Joël J. - 2017

Why are people so often overconfident? We conduct an experiment to test the hypothesis that people become overconfident to more effectively persuade or deceive others. After performing a cognitively challenging task, half of our subjects are informed that they can earn money by convincing others...

Persistent link: https://www.econbiz.de/10011663455

Overconfidence and bailouts

Gietl, Daniel - 2018

Empirical evidence suggests that managerial overconfidence and government guarantees contribute substantially to … excessive risk-taking in the banking industry. This paper incorporates managerial overconfidence and limited bank liability into … overestimates the returns to effort and risk. We find that managerial overconfidence necessitates an intervention into banker pay …

Persistent link: https://www.econbiz.de/10011985276

Does Having Insurance Change Individuals Self-Confidence?

Guber, Raphael; Kocher, Martin; Winter, Joachim - 2018

Recent research in contract theory on the effects of behavioral biases implicitly assumes that they are stable, in the sense of not being affected by the contracts themselves. In this paper, we provide evidence that this is not necessarily the case. We show that in an insurance context, being...

Persistent link: https://www.econbiz.de/10011932945

The Influence of Overconfidence and Competition Neglect On Entry Into Competition

Schüssler, Katharina - 2018

I investigate whether two mechanisms leading to biased beliefs about success, overconfidence and competition neglect … distributions related to absolute as well as relative overconfidence to study it comprehensively and introduce two treatment … variations: First, some participants receive detailed performance feedback addressing absolute and relative overconfidence before …

Persistent link: https://www.econbiz.de/10011932952

It's not my Fault! Self-Confidence and Experimentation

Hestermann, Nina; Le Yaouanq, Yves - 2018

We study the inference and experimentation problem of an agent in a situation where the outcomes depend on the individual\'s intrinsic ability and on an external variable. We analyze the mistakes made by decision-makers who hold inaccurate prior beliefs about their ability. Overconfident...

Persistent link: https://www.econbiz.de/10011932989

Taxing mobile and overconfident top earners

Haufler, Andreas; Nishimura, Yukihiro - 2022

are not. When governments maximize tax revenues, we show that overconfidence unambiguously reduces the bonus tax rate that … overconfidence is increased. …

Persistent link: https://www.econbiz.de/10013197558

Overconfidence and the political and financial behavior of a representative sample

Ahrens, Steffen; Bosch-Rosa, Ciril; Kassner, Bernhard - 2021

We study the relationship between overconfidence and the political and financial behavior of a nationally … representative sample. To do so, we introduce a new method of eliciting overconfidence that is simple to understand, quick to … price forecasting errors, and more extreme political views. Additionally, we find that overconfidence is correlated with …

Persistent link: https://www.econbiz.de/10012653508

Taming Overconfident CEOs Through Stricter Financial Regulation

Kassner, Bernhard - 2023

A large body of literature finds that managerial overconfidence increases risk-taking by financial institutions. This … introduced after the financial crisis as a natural experiment, I find that overconfidence-induced risk-taking decreases in … financial institutions subject to stricter regulation. Following the easing of these regulations, overconfidence-induced risk …

Persistent link: https://www.econbiz.de/10014467883

Earn more tomorrow: Overconfident income expectations and consumer indebtedness

Grohmann, Antonia; Menkhoff, Lukas; Merkle, Christoph; … - 2019

This paper examines whether biased income expectations due to overconfidence lead to higher levels of debt-taking. In a … represent real financial losses. To assess the external validity, we find further evidence for the link between overconfidence …

Persistent link: https://www.econbiz.de/10012141858

An experimental analysis of overconfidence in tarif choice

Dowling, Katharina; Spann, Martin; Stich, Lucas - 2019

biased. Overconfidence was identified as one of the key drivers. Yet, prior research is nonexperimental and focused on the so …-called flat-rate bias. By contrast, we examine the effects of overconfidence on tariff choice experimentally. We show that …

Persistent link: https://www.econbiz.de/10012141860