The Relationship between Overconfidence and the Introduction of Risky Products: Evidence from a Field Study

Abstract

To date, no field research has examined the effects of overconfidence on ill-structured decisions made by managers, such as product introductions. We explored this gap in the literature and found, in a study of high-technology firms, that overconfidence was positively related to the degree to which product introductions were pioneering (risky). Further, managers introducing pioneering products were more apt to express extreme certainty about achieving success, but these products were less likely to achieve success.