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This study investigated whether local Chief Executive Officers (CEOs) with a strong sense of power foster excessive investment compared with non-local CEOs to explore how the psychological impacts of power shape individual behaviour. This study observed a sample comprising 5460 firms from Chinese listed firms yearly between 2008 and 2020. This study found a strong association between local CEOs and excessive investment. The results of this study remain consistent after a series of robustness tests. Further analyses revealed that both CEO overconfidence and power are important factors shaping excessive investment. In conclusion, these findings revealed that local CEOs foster excessive investment owing to the psychological effects of sense of power. This study provides insights into the influence of the CEO's local status on corporate decision-making, which can be beneficial for policymakers, investors, and other stakeholders. [ABSTRACT FROM AUTHOR]

This study uses the newsvendor problemto investigate the correlations between thinking orientation, overconfidence, and economic outcome. We aim to shed light on possible interconnections between these variables and extend the existing conceptual models of thinking orientation and overconfidence. To test the conceptual model and the corresponding hypotheses empirically, we employed a laboratory experiment with 50 hypothetical decision periods in which 142 participants ordered a highly profitable product. We found compelling evidence that suggests overprecision as themediating variable between thinking orientation and the economic outcome. Furthermore, this research offers some practical implications. [ABSTRACT FROM AUTHOR]

Outsourcing, which has become an important employment strategy, is of increasing interest in both management theory and practice. This paper investigates the determinants of outsourcing from the perspective of CEO overconfidence using manually collected outsourcing data from Chinese A-share listed companies for the period 2012–2020. The empirical results show that firms with overconfident CEOs are more likely to adopt outsourcing strategies, and the asset specificity mitigates the positive effect of CEO overconfidence on outsourcing decisions. Furthermore, we find the moderating effect of asset specificity occurs mainly in private firms rather than SOEs and in large firms rather than small firms. Our results indicate inefficiencies associated with overconfidence should be classified as honest mistakes rather than deliberate actions, and strong corporate governance mechanisms help overconfident CEOs avoid making honest mistakes. [ABSTRACT FROM AUTHOR]

Prior research demonstrates that overconfident people are more likely to attain high-status positions of leadership and influence. However, the underlying motivational and behavioral mechanisms driving this relationship remain largely unexplored. In the present research, we sought to fill this gap in the literature by proposing that overconfidence is associated with stronger status motives and the pursuit of high-status positions via dominance-based strategies. In Studies 1 and 2, we find overconfidence to be positively related to the pursuit of high-status positions of leadership. In Studies 3 and 4, we find overconfident individuals to lean towards dominance- over prestige-based status-seeking strategies. Finally, in Study 4, a field study among real-world supervisor-subordinate dyads, we find an indirect effect of overconfidence on expected social status advancement through dominance. Together, the current studies offer novel insight into the relationship between overconfidence and social status advancement by identifying previously unexplored explanatory mechanisms. [ABSTRACT FROM AUTHOR]

The present study aims to investigate the impact of companies' business strategies on financial reporting quality taking into account the effect of managers' overconfidence. The data of 140 companies listed on the Tehran Stock Exchange for ten years, from 2013 to 2022, were collected based on the systematic deletion model, and hypotheses were tested using multivariate linear regression. The results revealed the type of strategy chosen by companies significantly affects the quality of financial reporting. Companies that pursue aggressive strategies demonstrate better financial reporting quality compared with defensive companies, which aligns with previous research results. Bermpei (2021) showed that companies' operating policies significantly impact financial reporting. The results also revealed that managerial overconfidence has a significant adverse effect on financial reporting quality; it reduces the significant impact of business strategy on the quality of financial reporting. In companies with overconfident managers, the significant impact of business strategy on the financial reporting quality is decreased. The findings provide valuable insight into the importance of selecting an appropriate business strategy for enhancing companies' financial reporting quality, which should be considered by professional authorities to strengthen the quality of financial reporting. [ABSTRACT FROM AUTHOR]

Overconfident behavior, the excessive willingness to bet on one's performance, may be driven by optimistic beliefs and/or ambiguity attitudes. Separating these factors is key for understanding and correcting overconfident behavior, as they call for different corrective actions. We present a method to do so, which we implement in two incentivized experiments. The first experiment shows the importance of ambiguity attitudes for overconfident behavior. Optimistic ambiguity attitudes (ambiguity seeking) counterbalanced the effect of pessimistic beliefs, leading to neither over- nor underconfident behavior. The second experiment applies our method in contexts where overconfident behavior is expected to vary: easy versus hard tasks. Our results showed that task difficulty affected both beliefs and ambiguity attitudes. However, although beliefs were more optimistic for relative performance (rank) and more pessimistic for absolute performance (score) on easy tasks compared with hard tasks, ambiguity attitudes were always more optimistic on easy tasks for both absolute and relative performance. Our findings show the subtle interplay between beliefs and ambiguity attitudes: they can reinforce or offset each other, depending on the context, increasing or lowering overconfident behavior. Yuval Rottenstreich, behavioral economics and decision analysis. Funding: This work was supported by HEC Paris research budget and Bocconi junior researchers' grants. Supplemental Material: The data and online appendix are available at https://doi.org/10.1287/mnsc.2021.00165. [ABSTRACT FROM AUTHOR]

Experts are expected to make well‐calibrated judgments within their field, yet a voluminous literature demonstrates miscalibration in human judgment. Calibration training aimed at improving subsequent calibration performance offers a potential solution. We tested the effect of commercial calibration training on a group of 70 intelligence analysts by comparing the miscalibration and bias of their judgments before and after a commercial training course meant to improve calibration across interval estimation and binary choice tasks. Training significantly improved calibration and bias overall, but this effect was contingent on the task. For interval estimation, analysts were overconfident before training and became better calibrated after training. For the binary choice task, however, analysts were initially underconfident and bias increased in this same direction post‐training. Improvement on the two tasks was also uncorrelated. Taken together, results indicate that the training shifted analyst bias toward less confidence rather than having improved metacognitive monitoring ability. [ABSTRACT FROM AUTHOR]

A two-factor account has been proposed as an explanatory model for the formation and maintenance of delusions. The first factor refers to a neurocognitive process leading to a significant change in subjective experience; the second factor has been regarded as a failure in hypothesis evaluation characterized by an impairment in metacognitive ability. This study was focused on the assessment of metacognition in patients with schizophrenia. The aims of the study were to measure the overconfidence in metacognitive judgments through the prediction of word list recall and to analyze the correlation between basic neurocognition (memory and executive function) and metacognition through a metamemory test and the severity of psychotic symptoms. Method: Fifty-one participants with a diagnosis of schizophrenia were evaluated. The Positive and Negative Syndrome Scale (PANSS) was used to assess the severity of psychiatric symptoms, and the subtest of metamemory included in the Executive Functions and Frontal Lobe-2 battery (BANFE-2) was used to evaluate overconfidence and underestimation errors, intrusion and perseverative response, total volume of recall, and Brief Functioning Assessment Scale (FAST) for social functioning. Results: The strongest correlation is observed between overconfidence errors and the positive factor of the PANSS (r = 0.774, p < 0.001). For the enter model in the multiple linear regression (r = 0.78, r2 = 0.61; F = 24.57, p < 0.001), the only significant predictor was overconfidence errors. Conclusion: Our results highlight the relevance of a metacognitive bias of overconfidence, strongly correlated with psychotic symptoms, and support the hypothesis that metacognitive defects contribute to the failure to reject contradictory evidence. From our perspective, these findings align with current mechanistic models of schizophrenia that focus on the role of the prefrontal cortex. [ABSTRACT FROM AUTHOR]

The construction industry has long been regarded as a relatively conservative and less innovative sector. Adjusting corporate governance structure is an effective method to promote innovation in the construction industry, as it can internally address the reluctance to innovate within companies. While it is widely known that the chief executive officer (CEO) plays a crucial role in firm innovation, few studies have explored the effects of CEO duality on innovation from a corporate governance aspect, which serves as a pressing need for construction industry. This study investigates the influence of CEO duality and its important moderating variable, CEO overconfidence, on corporate innovation based on a sample of stock-listed China construction companies and their patent data from 2009 to 2022. Quantile regression is applied to deeply investigate the variation in the impact of CEO duality throughout different conditional quantiles of the construction innovation performance distribution. The results demonstrate a favorable correlation between CEO duality and corporate innovation performance, and the promotion effect of CEO duality is more significant for firms with lower innovation performance. Additionally, CEO overconfidence negatively moderates the impact of CEO duality on corporate innovation. These findings indicate that CEO duality plays a noteworthy role in promoting corporate innovation within the construction industry and more effective corporate governance mechanism is needed to control CEO overconfidence, which promotes the negative impact of CEO duality. The research provides a research framework for exploring the dynamic impact of corporate governance structures on firm performance in the future. The results of this study are of significant importance for both the theoretical understanding and practical implementation of corporate governance mechanisms in the construction industry. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Chongqing University of Technology (Natural Science) is the property of Chongqing University of Technology and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper investigates how family events interacting with entrepreneurs' psychological affect and overconfidence impact new venture viability. We use panel data from the Australian Household, Income and Labor Dynamics survey, focusing on family event-induced psychological affect entrepreneurs experience as a predictor of new venture survival. Our accelerated failure time model shows that although negative family events interact with entrepreneur overconfidence to spur cautious behaviour, positive events interacting with overconfidence have the biggest impact (negative) on new ventures. The study enhances our understanding of the embeddedness of family in the entrepreneurial process and challenges past research by revealing how positive family events can have a greater negative impact on new venture survival than negative ones. [ABSTRACT FROM AUTHOR]

This study proposes the inverse differential information theory, which predicts a positive relationship between misestimation and misplacement, two types of overconfidence. The inverse differential information theory contrasts with the existing theory of differential information, which argues for a negative relationship between these two types of overconfidence. This study shows that these differences arise from opposing perspectives on the accuracy with which individuals assess their own abilities or performance compared to others'. The inverse differential information theory posits that people tend to evaluate others more objectively than they do themselves. A positive relationship between misestimation and misplacement predicts that overestimation and overplacement, as well as underestimation and underplacement, tend to occur together. Analysis using financial literacy data from South Korean adults supports the prediction of the inverse differential information theory. When these two types of overconfidence form a positive relationship, they are expected to have systematically a significant impact on human decision-making and behavior. This study empirically demonstrates that the positive relationship between misestimation and misplacement in financial literacy significantly influences individuals' financial behavior, specifically in the context of stock market participation experience. The inverse differential information theory requires further empirical validation across various domains, not just in the field of behavioral finance, to establish whether the positive interaction between misestimation and misplacement consistently influences human decision-making and behavior. [ABSTRACT FROM AUTHOR]

This study examines the performance target response to CEO overconfidence. Using unique handcollected data on the annual bonus targets of Standard & Poor's (S&P) 1500 firms, we find that boards ratchet targets more aggressively and apply greater ratcheting asymmetry for overconfident CEOs than for non-overconfident CEOs. These findings are robust to a battery of sensitivity tests. We also provide evidence that the increase in target ratcheting for overconfident CEOs is particularly more pronounced in firms with strong monitoring environments. Collectively, our findings suggest that boards actively consider CEOs' overconfidence when setting performance targets, providing new insight into the importance of CEOs' personal traits with respect to the incentive effects of performance target revisions. [ABSTRACT FROM AUTHOR]

Purpose – Determining the impact of behavioral influences on the stock market has significant implications for investment analysis and portfolio management. Behavioral biases are parameters that need to be considered in investment decision-making. The purpose of this study is to inform Bangladeshi investors about behavioral biases that they may encounter when making investment decisions in the prevailing frontier environment. Design/methodology/approach – Through the chi-square test, one-way ANOVA, paired-samples t-test and descriptive analysis based on the facts collected from 281 respondents of the Dhaka Stock Exchange (DSE), the study has found that individual investors of Bangladesh often make investment decisions emotionally rather than based on theories. Findings – The result shows that risk aversion and risk perception are the two most influential emotional dimensions that impact investors' decisions. The findings are consistent with the other researchers and highlight the fact that investors hardly act according to the norms recommended in the financial theories. Research limitations/implications – The findings are grounded on a small portion of investors at DSE on some particular days, which is not sufficient to study individual investors' entire complex decision-making behavior from various angles. Many respondents were reluctant and even confused to disclose their behavioral aspects. These, along with biased and careless answers, may impede the identification of the actual scenario of the behavioral responses in decision-making that demand further study. Originality/value – The novelty of this study is unique in that it examined investors of the DSE, who are considered to be a representative in a frontier market like Bangladesh. Since this market is not very resilient, small investors need to be aware of the biases of behavioral factors to survive.

This study examines the impact of shared decision-making on investor overconfidence. Data from 2,000 investors, 6,394 consumers, and 657 experimental participants shed light on whether consumers who engage in joint financial decision-making are less affected by investor overconfidence than those who decide on their own. The findings show that investors who jointly decide are substantially less overconfident. However, family- or friend-inclined interactions are more effective in reducing overconfidence than relying on a financial advisor. The current research theoretically argues and empirically shows that shared metaknowledge drives this diminishing effect by highlighting unknown aspects of a financial decision. Compared to providing investors with solutions, problem reformulation, validation, or legitimation, only metaknowledge consistently decreases overconfidence in joint financial decision-making. It is argued that the process of highlighting unknowns can explain why interactions with family and friends have a more pronounced impact on investor overconfidence than consulting a professional advisor. The study provides a feasible debiasing tool to consumers, financial institutions, and other financial service providers to decrease overconfidence by emphasizing unknown aspects of an investment toward improving the quality of a consumer's financial decisions under uncertainty. [ABSTRACT FROM AUTHOR]

Cognitive biases often influence investor behavior in developing capital markets, leading to market anomalies and affecting overall market efficiency. With the increasing integration of global financial markets and the growing participation of retail investors, understanding these biases is more critical than ever. While market anomalies have been extensively studied in developed markets, their influence in developing economies remains under-explored. This study aims to examine the impact of heuristic biases on investment decisions, focusing on Nepal’s stock market. Structural Equation Modeling is used to assess how perceived market efficiency mediates the relationship between heuristic biases and investor behavior. Data were collected from purposively selected 403 active individual investors in Nepal Stock Exchange (NEPSE). The findings reveal that representative and overconfidence biases significantly and positively influence investment decisions and market efficiency. Specifically, investors exhibiting these biases are more likely to make confident and bold investment choices, believing in their ability to predict market movements accurately. Furthermore, the study finds that perceived market efficiency mediates the relationship between anchoring and adjustment bias and investment decisions, suggesting that investors who rely heavily on initial information (anchors) adjust their decisions based on their perceptions of market efficiency. The results highlight the critical role of heuristic biases in shaping investor behavior and stress the importance of market efficiency in this process. The study emphasizes the need to enhance investor awareness of these biases and implement policies to improve market transparency and efficiency. Such measures are vital for mitigating risks and fostering a more robust and resilient financial market in developing economies like Nepal.

This study aimed to examine how soccer referees make decisions about issuing yellow cards for fouls. The research involved 60 male participants, divided into expert (n=30) and novice (n=30) groups based on their experience and qualifications as referees. They took part in a 2x2x2 mixed-design experiment. The study looked at Decision-Making Style (DMS: Analytical Decision-Making [ADM] vs. Intuitive Decision-Making [IDM]), Video Type (yellow card foul vs. nonyellow card foul), and Referee Level (expert vs. novice) as independent variables. The dependent variables were accuracy rate (ACC), discrimination index (D), self-confidence index (C), and overconfidence index (OC). The findings showed that Analytical Decision-Making (ADM) led to higher accuracy compared to Intuitive Decision-Making (IDM). Expert referees demonstrated better accuracy than novice referees. There was also an interaction between Decision-Making Style and Referee Level, showing differences in the effectiveness of ADM and IDM between expert and novice referees. Additionally, the study revealed that both expert and novice referees showed overconfidence, with experts demonstrating significantly higher overconfidence, particularly during IDM. In conclusion, the research highlighted the complexity of referees' decisionmaking in high-pressure situations and emphasized the potential benefits of employing Analytical Decision-Making strategies. The study contributed to understanding cognitive biases in sports officiating and suggested the need for targeted training programs to help referees improve their performance and reduce overconfidence in challenging situations. [ABSTRACT FROM AUTHOR]

Copyright of Financial & Business Studies Journal / Maǧallaẗ Al-Dirāsāt Al-Māliyyaẗ wa Al-Tiǧāriyyaẗ is the property of Beni Suef University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Background: Undergraduate training in hand hygiene is a keystone of infection control. Several studies have shown overconfidence effects in hand hygiene practices, which can impair metacognition. We hypothesized that overconfidence might be prevalent in the early education stages of nursing students and that these effects could be reduced through frequent interactive learning formats, such as learning groups. Methods: We conducted a multicenter cross-sectional questionnaire with 196 German nursing students, including general, surgical, and anesthetic nursing specializations. Results: Overconfidence was observed in nursing students across all specialties and years of education. The cluster analyses showed three different types of learners: two characterized by overconfidence and one demonstrating justifiable confidence. Furthermore, the moderation analysis indicated that providing feedback and promoting metacognition regarding students' learning achievements could mitigate overplacement, particularly through the frequent implementation of interactive teaching formats. Discussion: Despite some limitations, these findings highlight the prevalence of overconfidence effects in nursing students, the presence of different learning profiles, and the importance of incorporating feedback within interactive learning formats concerning hand hygiene. Accordingly, educators need to be trained and supervised to deliver these learning formats and provide feedback to students effectively. [ABSTRACT FROM AUTHOR]

This study empirically tests the hypothesis in the literature that women, in their investment decisions, tend to show greater risk aversion and/or a lower degree of optimism than their male counterparts by analyzing investment recommendations by Equity Research analysts in Brazil. Based on a sample of 7496 recommendations for the main companies listed on the B3 between 2009-2021, a statistically significant effect was found in the opposite direction to that predicted: recommendations made by women tended to be more optimistic. We found that the difference is specific to sell recommendations, issued more frequently by men and that the effect disappears when controlling for the coverage sector and institution, which suggests that the difference is due to the fact of women, who account for only 12.8% of all recommendations, focus on covering specific sectors, such as consumption. [ABSTRACT FROM AUTHOR]

The present study investigated whether calibration accuracy in metacognitive judgment on performance and the positively biased self‐evaluation of competence are distinct and whether they play independent roles in learning. A sample of 432 sixth‐graders reported their pre‐test competence for solving math problems and the post‐test calibration of performance, and these measures were compared with their actual math‐test scores to compute overconfidence and calibration accuracy. Data analyses indicated (a) that a positive correlation existed between accurate calibration and overconfidence; (b) that high‐achieving students calibrated performance accurately but overestimated their competence; and (c) that accurate calibration and overconfidence independently predicted positive learning behaviors, highlighting that both self‐evaluation indices contribute to self‐regulated learning in their own way. [ABSTRACT FROM AUTHOR]

The present study investigated whether calibration accuracy in metacognitive judgment on performance and the positively biased self‐evaluation of competence are distinct and whether they play independent roles in learning. A sample of 432 sixth‐graders reported their pre‐test competence for solving math problems and the post‐test calibration of performance, and these measures were compared with their actual math‐test scores to compute overconfidence and calibration accuracy. Data analyses indicated (a) that a positive correlation existed between accurate calibration and overconfidence; (b) that high‐achieving students calibrated performance accurately but overestimated their competence; and (c) that accurate calibration and overconfidence independently predicted positive learning behaviors, highlighting that both self‐evaluation indices contribute to self‐regulated learning in their own way. [ABSTRACT FROM AUTHOR]

This study examines whether managerial overconfidence coupled with self‐attribution bias distorts the investment decisions of firms. To this end, we investigate the impact of overconfidence on asymmetric investment cash flow sensitivity (ICS). We find that managerial overconfidence affects ICS in a downward‐sticky direction, which is reinforced by overconfidence coupled with managerial self‐attribution. The results for both unconstrained and constrained firms are qualitatively consistent with those for the overall sample; however, the constrained subsample provides slightly weaker results. Thus, our findings indicate that managerial overconfidence and self‐attribution to recent successes may induce managers to make excessive investment commitments. [ABSTRACT FROM AUTHOR]

Obstacles and threats are common occurrences for entrepreneurs in their journey of starting and surviving a venture. These challenges often induce a fear of failure in entrepreneurs, sometimes affecting their mental well-being. Although coping literature lists several explicit mechanisms to mitigate the adverse impact of entrepreneurial fear of failure, empirical evidence suggesting the role of some intrinsic typical entrepreneurial characteristics such as overconfidence and optimism is missing from the extant knowledge bank. Our study joins those missing links by studying the role of entrepreneurs' confidence elements—overconfidence and optimism in entrepreneurial fear of failure. We adopted stress appraisal theory and experience sampling methodology to explore the hypothesized relations. We triangulate our results with semi-structured interviews with entrepreneurs. Our findings reveal the positive side of entrepreneurs' confidence in dealing with stress and fear of failure. Therefore, we contribute to the entrepreneurial well-being literature and provide a reason for practicing entrepreneurs to build on their confidence. [ABSTRACT FROM AUTHOR]

This paper explores how investor overconfidence impacts reactions to stock market crashes. Using the 2018 Investor Survey dataset from FINRA we measure respondent's self-perceived and actual investment knowledge and thus are able to identify overconfident investors from other investors. In our analysis, we find overconfident investors were significantly more likely to sell after a stock market crash than other investors, and thus more likely to lock-in the losses from the crash and miss subsequent upswings in the market. Moreover, these overconfident investors were significantly more likely than other investors to pursue risky investment strategies such as cryptocurrencies, margin accounts, options, and penny stocks that can also lead to large losses. Finally, we find that accurately aware investors, investors who have both high perceived and actual knowledge, buy significantly more after a crash. [ABSTRACT FROM AUTHOR]

Intuition is a central element of entrepreneurial decision-making. We conceptually replicate a published study by using new representative data from 1961 adults and the widely used Cognitive Reflection Test, which assesses the ability to avoid intuitive decisions and to switch to an analytical process. We extend the analysis by exploring occupational sorting versus environmental influence as mechanisms, the role of overconfidence, and heterogeneity. Our results confirm that entrepreneurs do not resist intuitive (but potentially wrong) decisions as much as hired managers do. Our extensions suggest that this difference is not fully explained by occupational sorting, but partially by overconfidence. [ABSTRACT FROM AUTHOR]

Overestimation and miscalibration increase with a decrease in performance. This finding has been attributed to a common factor: participants’ knowledge and skills about the task performed. Researchers proposed that the same knowledge and skills needed for performing well in a test are also required for accurately evaluating one’s performance. Thus, when people lack knowledge about a topic they are tested on, they perform poorly and do not know they did so. This is a compelling explanation for why low performers overestimate themselves, but such increases in overconfidence can also be due to statistical artifacts. Therefore, whether overestimation indicates lack of awareness is debatable, and additional studies are needed to clarify this issue. The present study addressed this problem by investigating the extent to which students at different levels of performance know that their self-estimates are biased. We asked 653 college students to estimate their performance in an exam and subsequently rate how confident they were that their self-estimates were accurate. The latter judgment is known as second-order judgments (SOJs) because it is a judgment of a metacognitive judgment. We then looked at whether miscalibration predicts SOJs per quartile. The findings showed that the relationship between miscalibration and SOJs was negative for high performers and positive for low performers. Specifically, for low performers, the less calibrated their selfestimates were the more confident they were in their accuracy. This finding supports the claim that awareness of what one knows and does not know depends in part on how much one knows. [ABSTRACT FROM AUTHOR]

Objective: The purpose of this study was to examine the impact of auditors' narcissism and overconfidence on audit quality through the leadership ability of auditors. Methodology: This research is applied in terms of its purpose and employs a survey methodology with structural equation modeling for data collection. The population of this study comprises all partners and managers who are members of the Institute of Certified Accountants of Iran and were employed in auditing organizations or private firms during the year 2022. A sample of 326 individuals was randomly selected based on Cochran's formula. Data were collected using standard questionnaires containing 84 Likert-scale questions. Descriptive and inferential analysis of the collected data and hypothesis testing were conducted using structural equation modeling (SEM) with partial least squares (PLS) approach using SPSS and PLS software. Findings: The findings indicate that the leadership ability of audit teams, led by partners and managers, has a positive and significant impact on audit quality. Furthermore, the narcissism of auditors positively and significantly affects audit quality through their leadership ability, while, according to the theory of leadership personality traits, overconfidence negatively and significantly affects audit quality through the leadership ability of auditors. Conclusion: Therefore, attention to leadership in audit teams and a moderate level of narcissism and confidence are necessary and essential for auditors in leadership positions. [ABSTRACT FROM AUTHOR]

We study belief updating about relative performance in an ego-relevant task. Manipulating the perceived ego relevance of the task, we show that subjects substantially overweight positive information relative to negative information because they derive direct utility from holding positive beliefs. This finding provides a behavioral explanation why and how overconfidence can evolve in the presence of objective information. Moreover, we document that subjects who receive more negative information downplay the ego relevance of the task. These findings suggest that subjects use two alternative strategies to protect their ego when presented with objective information. This paper was accepted by Marie Claire Villeval, behavioral economics and decision analysis. Funding: The authors gratefully acknowledge financial support from the ExperimenTUM. Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mnsc.2023.02537. [ABSTRACT FROM AUTHOR]

This study aims to test and analyze the influence of financial behavior, overconfidence, and risk perception on financial literacy and investment decisions in the millennial generation in Jakarta. This study was conducted using quantitative methods, structural equation modeling (SEM), and assisted by the Smart PLS 4.0 program with a total of 100 respondents with an average age of 25-35 years. The structural model was evaluated using R-square for dependent constructs, Stone-Geisser Q-square test for Q2 predictive relevance, and significance test of structural path parameter coefficients. The results of this study can be an input in the development of investment behavior theory, especially investment decision-making, as well as the mediation role of financial literacy in these relationships, on individual millennial investors in the Jakarta area. The study found that financial behavior and overconfidence significantly impact the financial literacy of the Millennial Generation in Jakarta, while overconfidence did not. It is recommended that Millennial investors focus on improving their financial literacy, risk perception, and financial behavior to influence investment decisions, while avoiding overconfidence. [ABSTRACT FROM AUTHOR]

In the realm of investment decisions, the influence of behavioral biases has emerged as a captivating area of exploration. This article embarks on a comprehensive journey through the landscape of behavioral biases in investment choices, delving into their profound impact on financial markets. Contrary to traditional finance theories assuming rationality, a multitude of empirical evidence attests to the pervasive effects of cognitive and emotional biases. Through an extensive literature review, this article elucidates the intricacies of key biases such as overconfidence, loss aversion, anchoring, confirmation bias, herding behavior, disposition effect, framing effects, and regret aversion. By examining the distinct ways these biases distort investors' judgment and decision-making processes, we unveil the often unexpected deviations from rationality. Each bias, rooted in human psychology, can lead to suboptimal investment behaviors, portfolio misalignments, and heightened market volatility. However, recognizing the impact of these biases provides opportunities for transformative insights. As investment professionals, policymakers, and individuals alike comprehend the subtle nuances of behavioral biases, tailored interventions, educational initiatives, and adaptive strategies can be devised to mitigate their adverse effects. This article not only synthesizes the prevailing research but also charts a course for future investigations. The implications of understanding and addressing behavioral biases extend beyond financial realms, offering a bridge between finance and psychology. As interdisciplinary collaboration gains momentum, pathways for future research become evident, beckoning scholars to delve deeper into the uncharted territories of human behavior and its intricate relationship with investment decisions. Through the exploration of these biases and their potential remedies, this article illuminates the evolving landscape of investment decision-making in a world where cognitive fallacies intersect with financial choicest. [ABSTRACT FROM AUTHOR]

Investment has evolved from a mere societal desire to a necessity, driven by the quest for higher returns in a shorter time frame. The millennial generation, being the largest population in its productive years, holds a significant role in investment activities. However, many millennials face challenges in achieving their expected investment results, possibly due to factors such as inadequate financial literacy, deficient risk management, and overconfidence in their investment decisions. This study aims to scrutinize the impact of financial literacy, risk perception, and overconfidence on investment decisions among millennials in Jakarta, offering insights to both investors and practitioners. By testing financial literacy as a moderator in the relationship between risk perception, overconfidence, and investment decisions, the research fills a literature gap. Through a quantitative survey of 200 millennial investors in Jakarta and PLS-SEM analysis, the study reveals that overconfidence and risk perception positively influence investment decisions. Additionally, financial literacy moderates the effect of overconfidence but not risk perception on investment decisions. The findings provide valuable guidance for investors, emphasizing the crucial role of financial literacy in mitigating irrational behavior during decision-making, thereby influencing investment choices. [ABSTRACT FROM AUTHOR]

It is generally assumed that decision-makers appear more competent and trustworthy when exuding confidence in their choices. However, many decisions are by their nature uncertain. Is it possible for a decision-maker to admit uncertainty and still be trusted? We propose that the communicated type of uncertainty may matter. Internal uncertainty, which signals lack of knowledge or a low degree of belief, may be viewed more negatively than external uncertainty, which is associated with randomness and complexity. The results of a series of experiments suggested that people viewed leaders as more competent when they expressed uncertainty about a decision in external ("It is uncertain") rather than internal terms ("I am uncertain"), overall effect size d = 0.45 [0.16, 0.74]. Paradoxically, when asked directly, participants expressed that leaders should be open about uncertainty rather than exuding confidence and downplaying uncertainty. A final study suggested that decision makers were more willing to reveal uncertainty about a choice to others when they perceived the uncertainty as more external and less internal and expected more positive and fewer negative consequences from expressing external rather than internal uncertainty. [ABSTRACT FROM AUTHOR]

Copyright of Kastamonu University Journal of Economics & Administrative Sciences Faculty / Kastamonu Üniversitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi is the property of Kastamonu University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The derivative market is growing faster than capital markets in recent years. Investors' focus is moved towards the futures market rather than on the stock market. The involvement of individual investors has increased in the derivative market. In investing, biases lead investors to make irrational and emotional decisions. The study tracks how investors' behavioural biases influence their investment decisions and also analyses the moderating effect of "financial literacy" and "self-efficacy" in the derivatives market. The snowball sampling technique was used to collect the primary data from 125 investors from Coimbatore city. Factor Analysis, Multiple Regression, and Structural equation Model were used for analysis. The results revealed that Behavioural biases such as "Herding Behaviour", "Overconfidence" and "Mental Accounting" positively affect investing in the derivative market and the moderating variables "Financial Literacy", and "Self-Efficacy" directly influence the behaviour of the investors which in turn affects derivative trading. [ABSTRACT FROM AUTHOR]

The study aims to comprehensively examine the behavioral biases of fund managers by conducting a bibliometric analysis of research papers published during the years 2011–2022 from the Scopus database based on the keywords searched for behavioral biases of fund managers. One hundred and thirty-five articles have been chosen after careful review. This article explains the most cited articles, top authors, leading countries, prolific journals, and important keywords. This study has identified 10 different types of behavioral biases which are summarized in this article. In this review article, we only considered the journal articles excluding conference publications, editorials, and book chapters. This article is based on the existing literature on behavioral biases in investment decision-making processes. This study will be helpful for researchers and academicians to understand the impact of behavioral biases on investment decisions and to reduce it. Finally, this research will provide a roadmap for future research. [ABSTRACT FROM AUTHOR]

This paper investigates the influence of overconfidence and misjudgement of merit on the decision to enter a winner-take-all market. Through a lab-in-the-field experiment conducted in Panama's dynamic and diverse entrepreneurial ecosystem, the study addresses a research gap by exploring the interplay between overconfidence, institutional factors, and entrepreneurial activities. The findings confirm the role of overconfidence as a determinant of market entry and reveal that overconfidence primarily empowers individuals already embedded in entrepreneurial net- works, regardless of their destructiveness. These results suggest that in the presence of weak institutions, overconfidence does not promote entrepreneurship but rather motivates those with pre-existing entrepreneurial networks to open new ventures. However, this situation has the potential to exacerbate inequalities, especially if these ventures make only marginal contributions to overall social output. [ABSTRACT FROM AUTHOR]

The study's purpose is to examine the effect of herding, loss aversion, overconfidence, and fear of missing out (FOMO) biases on crypto investors' investment decisions. The study also looks at how FOMO plays a mediating role between herding, loss aversion, overconfidence, and crypto investment decisions. To acquire data from crypto retail investors, the study used a questionnaire survey. A total of 473 responses were gathered and analyzed with SmartPLS. To achieve the study's aims, factor analysis and partial least square structural equation modelling were used. The study's findings found that FOMO, herding, loss aversion, and overconfidence biases have a substantial effect on the investment decisions of crypto investors, in respective order. In addition, FOMO bias establishes a complementary partial mediation on the relationship between herding, loss aversion, and crypto investors' decision-making behavior. Ergo, the present study assisted individual and institutional cryptocurrency investors, crypto portfolio managers, policymakers, researchers, and market regulators in broadening their knowledge base about cryptocurrency and forecasting investors' behavior. Hence, this study contributes to the field of behavioral finance. [ABSTRACT FROM AUTHOR]

This study uses the newsvendor problem to investigate the correlations between thinking orientation, overconfidence, and economic outcome. We aim to shed light on possible interconnections between these variables and extend the existing conceptual models of thinking orientation and overconfidence. To test the conceptual model and the corresponding hypotheses empirically, we employed a laboratory experiment with 50 hypothetical decision periods in which 142 participants ordered a highly profitable product. We found compelling evidence that suggests overprecision as the mediating variable between thinking orientation and the economic outcome. Furthermore, this research offers some practical implications.