The Impact of Overconfidence and Ambiguity Attitude on Market Entry

Gutierrez, Cédric; Astebro, Thomas B.; Obłój, Tomasz

doi:10.1287/orsc.2019.1300

Cited by 27 publications

(17 citation statements)

References 87 publications

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“…Moreover, the findings are in line with the "Ikea effect," which describes an increased positive valuation of "self"-made products (Hooshangi & Loewenstein 2018). Focusing on the consequences of overconfidence, Gutierrez et al (2020) provided evidence for a causal effect of overconfidence on entering a market, in particular when people believe that the outcome depends on their skills and not on chance.…”

Section: Cognition From a Process Perspectivesupporting

confidence: 65%

The Psychology of Entrepreneurship: Action and Process

Gielnik

2023

Annu. Rev. Organ. Psychol. Organ. Behav.

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We review the research on the psychology of entrepreneurship of the last decade. We focus on two key topics in entrepreneurship research: action and process. Combining action and process in a model of the psychology of entrepreneurship, we present the action theory process model of entrepreneurship and use it as a guiding framework for the review. We discuss theories of action, such as effectuation/causation, bricolage, theory of planned behavior, and action theory. Furthermore, we adopt a process perspective to discuss antecedents of actions in terms of cognition, motivation, and emotion and how they develop during the entrepreneurial process. The process perspective considers recursive relationships and dynamic changes in actions and their antecedents over time. We conclude that the action theory process model is a useful starting point to explain the psychological dynamics of entrepreneurship. Expected final online publication date for the Annual Review of Organizational Psychology and Organizational Behavior, Volume 10 is January 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

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Section: Cognition From a Process Perspectivesupporting

confidence: 65%

The Psychology of Entrepreneurship: Action and Process

Gielnik

2023

Annu. Rev. Organ. Psychol. Organ. Behav.

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“…The concept of cognitive biases was first introduced by Kahneman and Tversky (1972) as errors in judgment, some of which are related to memory and others to the problem. Heuristic biases relate to mental shortcuts used in decisionmaking (Gutierrez et al, 2020) that often result in systematic errors in judgment (Kahneman and Tversky, 1972). In the stock exchange market, heuristic bias is a common phenomenon that affects investors (Tversky and Kahneman, 1974).…”

Section: Introductionmentioning

confidence: 99%

Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors

et al. 2020

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The paper examines the direct and indirect effects (via investors' risk perception) of heuristic biases on investors' irrational behavior in decision-making. The study also investigates the moderating effect of investors' extraversion on both the direct and the indirect associations between heuristic biases and irrational decision-making. Based on survey data collected from 247 investors registered in various brokerage houses in Pakistan and the analyses (mediation and moderation) performed using the Process Macro technique (proposed by Hayes, 2017) in SPSS, the results of this study reveal that heuristic biases positively affect investors' irrational decision-making both directly and indirectly via risk perception. The results reveal that extraversion moderates both direct and indirect associations between heuristic biases and investors' irrational behavior in decision-making. Our findings carry useful practical implications for organizations' policymakers.

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“…This finding may reflect that those participants may feel more comfortable in dealing with ambiguity resulting in making choices outside best practice recommendations. Previous studies showed that the preference for ambiguity was attributed to overconfidence, which could be a potential explanation for our findings [ 32 , 33 ].…”

Section: Discussionmentioning

confidence: 49%

Therapeutic Decision-Making Under Uncertainty in the Management of Spinal Muscular Atrophy: Results From DECISIONS-SMA Study

et al. 2022

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Introduction There are many uncertainties about treatment selection and expectations regarding therapeutic goals and benefits in the new landscape of spinal muscular atrophy (SMA). Our aim was to assess treatment preferences and expectations of pediatric neurologists caring for patients with SMA. Methods DECISIONS-SMA is a non-interventional, cross-sectional pilot study that assessed pediatric neurologists with expertise in SMA from across Spain. Participants were presented with 11 simulated case scenarios of common encounters of patients with SMA type 1 and 2 to assess treatment initiation, escalation, or switches. We also asked for the expected benefit with new therapies for four simulated case scenarios. Participants completed a behavioral battery to address their tolerance to uncertainty and aversion to ambiguity. The primary outcome was therapeutic inertia (TI), defined as the number of simulated scenarios with lack of treatment initiation or escalation when warranted over the total (11) presented cases. Results A total of 35 participants completed the study. Participants’ mean (SD) expectation for achieving an improvement by starting a new therapy for SMA type 1 (case 1, a 5-month-old) and SMA type 2 (case 6, a 1-year-old) were both 59.6% (± 21.8), but declined to 20.2% (± 12.2) for a case scenario of a 16-year-old treatment-naïve patient with long-standing SMA type 2 with severe disability. The mean (SD) TI score was 4.2 (1.7), and 3.29 (1.5) for treatment initiation. Of a total 385 individual responses, TI was observed in 147 (38.2%) of treatment choices. The multivariable analysis showed that lower aversion to ambiguity ( p = 0.019) and lower expectation of treatment response ( p = 0.007) were associated with higher TI after adjustment for participants’ age and years of experience. Older age ( p = 0.019), lower years of experience ( p = 0.035), lower aversion to ambiguity ( p = 0.015), and lower expectation of treatment benefits ( p = 0.006) were associated with inertia for treatment initiation. Conclusions Pediatric neurologists managing patients with SMA were optimistic regarding treatment improvement in cases with early diagnosis, but had lower expectations when treatment delays and advanced patient age were present. Low aversion to ambiguity, low expectation of treatment benefits, and lower clinical experience were more likely to make suboptimal decisions, resulting in lack of treatment initiation, escalation, and TI. Supplementary Information The online version contains supplementary material available at 10.1007/s40120-022-00366-4.

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The Impact of Overconfidence and Ambiguity Attitude on Market Entry

Cited by 27 publications

References 87 publications

The Psychology of Entrepreneurship: Action and Process

The Psychology of Entrepreneurship: Action and Process

Cognitive Bias and the Extraversion Personality Shaping the Behavior of Investors

Therapeutic Decision-Making Under Uncertainty in the Management of Spinal Muscular Atrophy: Results From DECISIONS-SMA Study

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