Behavioral CEOs: The Role of Managerial Overconfidence

In this paper, we provide a theoretical and empirical framework that allows us to synthesize and assess the burgeoning literature on CEO overconfidence. We also provide novel empirical evidence that overconfidence matters for corporate investment decisions in a framework that explicitly addresses th...

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Veröffentlicht in:	The Journal of economic perspectives 2015-10, Vol.29 (4), p.37-60
Hauptverfasser:	Malmendier, Ulrike, Tate, Geoffrey
Format:	Artikel
Sprache:	eng
Schlagworte:	Acquisitions & mergers Behavioral decision theory Behavioral economics Business management Business structures Capital budgeting Capital expenditures Capital investments Cash flow Chief executive officers Confidence Corporate finance Debt financing Decision making Economic models Economic statistics Economic theory Economics Efficient markets Financial investments Investment policy Investment strategies Investments Investors Managers Occupational psychology Organizational behavior Organizational behaviour Prices Psychological aspects Social psychology Stock options Stock prices Strategic management Studies Symposium: Overconfidence
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Beschreibung
Zusammenfassung:	In this paper, we provide a theoretical and empirical framework that allows us to synthesize and assess the burgeoning literature on CEO overconfidence. We also provide novel empirical evidence that overconfidence matters for corporate investment decisions in a framework that explicitly addresses the endogeneity of firms' financing constraints.
ISSN:	0895-3309 1944-7965
DOI:	10.1257/jep.29.4.37