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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title How do judgmental overconfidence and overoptimism shape innovative activity?
Organization Unit
  • Holger Herz
  • Daniel Schunk
  • Christian Zehnder
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 106
ISSN 1664-7041
Number of Pages 42
Date 2013
Abstract Text Recent field evidence suggests a positive link between overconfidence and innovative activities. In this paper we argue that the connection between overconfidence and innovation is more complex than the previous literature suggests. In particular, we show theoretically and experimentally that different forms of overconfidence may have opposing effects on innovative activity. While overoptimism is positively associated with innovation, judgmental overconfidence is negatively linked to innovation. Our results indicate that future research is well advised to take into account that the relationship between innovation and overconfidence may crucially depend on what type of overconfidence is most prevalent in a particular context.
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Keywords Innovation, entrepreneurship, overconfidence, experiment, Optimismus, Vertrauen, Innovation
Additional Information Revised version