Publication details

The overconfidence bias and CEO: A literature overview

Authors

ČULÁKOVÁ Tereza KOTRUS Peter UHLÍŘOVÁ Anna JIRÁSEK Michal

Year of publication 2017
Type Article in Periodical
Magazine / Source Trendy v podnikání
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web https://www.dfek.zcu.cz/tvp/doc/akt/2-2017-clanek-1.pdf
Field Management and administrative
Keywords overconfidence bias; decision-making; CEO; top management teams
Description This systematic review deals the overconfidence bias. It is a cognitive bias which is described as the tendency of people to overestimate their abilities, prospects and chances of success. For the purpose of the research we chose to examine the influence of overconfidence bias on CEOs’ decision-making and their work in a company. The systematic review followed three main situations revealing CEOs’ overconfidence within a company – dividend policy, innovative processes and hiring new employees. According to the review of the literature, there is no obvious connection between CEOs’ overconfidence and a generous dividend policy. However, as for the innovative processes, it seems that overconfident CEOs are more willing to support a higher number of innovations. In the final situation, the literature does not yet provide decisive guidance on the relationship between CEOs’ overconfidence and the process of managing employees and hiring new ones.
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