Executive Summary
Most of us think of overconfidence as a bad thing, but there are ample stories of overconfident—and successful—CEOs. Is it possible that in a leadership role, overconfidence might have an upside? To study it more closely, a research team examined 1,921 U.S. companies over the period from 1993 to 2011, quantifying overconfidence by tracking the CEO’s vested-in-the-money stock options. Only the most overconfident CEOs would have such strong belief in their abilities that they are willing to excessively risk their personal wealth. The researchers…
