TY - JOUR
T1 - The bright side of managerial over-optimism
AU - Hilary, Gilles
AU - Hsu, Charles
AU - Segal, Benjamin
AU - Wang, Rencheng
N1 - Publisher Copyright:
© 2016 Elsevier B.V.
PY - 2016/8/1
Y1 - 2016/8/1
N2 - Human estimation and inference are subject to systematic biases such as overconfidence and over-optimism. In contrast to prior research that has identified multiple negative consequences of these biases, we focus on positive effects. We empirically examine a setting in which over-optimism a) is a related but different bias from overconfidence, b) emerges dynamically in a rational economic framework, and c) generates higher managerial effort. Importantly, this additional effort improves firm profitability and market value.
AB - Human estimation and inference are subject to systematic biases such as overconfidence and over-optimism. In contrast to prior research that has identified multiple negative consequences of these biases, we focus on positive effects. We empirically examine a setting in which over-optimism a) is a related but different bias from overconfidence, b) emerges dynamically in a rational economic framework, and c) generates higher managerial effort. Importantly, this additional effort improves firm profitability and market value.
KW - Firm performance
KW - Managerial effort
KW - Over-optimism
UR - http://www.scopus.com/inward/record.url?scp=84965053095&partnerID=8YFLogxK
U2 - 10.1016/j.jacceco.2016.04.001
DO - 10.1016/j.jacceco.2016.04.001
M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???
AN - SCOPUS:84965053095
SN - 0165-4101
VL - 62
SP - 46
EP - 64
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
IS - 1
ER -