Starjournal Quotation Schumacher, Christian, Keck, Steffen, Tang, Wenjie. 2020. Biased interpretation of performance feedback: The role of CEO overconfidence. Strategic Management Journal. 41 (6), 1139-1165.




This study examines how managerial biases in the form of overconfidence change the interpretation of performance feedback and, consequently, shape a firm's risk taking in response to it. Our formal analysis suggests that CEO overconfidence is associated with a lower willingness to increase firm risk taking when facing negative performance feedback and a higher willingness to decrease risk when facing positive feedback. An extension of our model also shows that, when firms are operating close to their survival level, the effects of CEO overconfidence will reverse. We test our predictions empirically with a sample of 847 American manufacturing firms in the years 1992 to 2014. Our results are consistent with our hypotheses and are robust to different empirical operationalizations of CEO overconfidence.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Strategic Management Journal
Citation Index SSCI
WU Journalrating 2009 A+
Starjournal Y
Language English
Title Biased interpretation of performance feedback: The role of CEO overconfidence
Volume 41
Number 6
Year 2020
Page from 1139
Page to 1165
Reviewed? Y
Open Access Y
Open Access Link


Schumacher, Christian (Former researcher)
Keck, Steffen (University of Vienna, Austria)
Tang, Wenjie (NUS, Singapore)
Institute for International Business (Mohr) (Details)
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