Abstract

This research concerns the role of overconfidence (OC), dependent on its psychological origins on three dimensions of entrepreneurial management that are supposed to influence entrepreneurial firm survival and performance. OC, defined as an overestimation of one’s own ability to make accurate forecasts, or, alternatively, as an overestimation of one’s own ability relative to others (the ‘better-than-average’ effect), is an important issue in entrepreneurship. On one hand, it could be shown that OC is positively linked to entrepreneurship (firm creation) and that entrepreneurs are generally more over-confident than other individuals such as managers. On the other hand, it had been argued that OC might increase the mortality risk of firms. In this paper, we enrich the OC discussion by taking into account the origins of OC and the effects of sources of OC on an entrepreneur’s management style, which in turn influences the survival and performance of entrepreneurial firms.

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