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Overconfidence

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The Palgrave Encyclopedia of Strategic Management

Abstract

This article considers the phenomenon of overconfidence whereby an individual, group or organization believes that it has more knowledge or skill in a particular domain than it actually possesses. It outlines the three distinct forms of confidence that have been identified in the literature: misestimation, misplacement and misprecision. It goes on to discuss various ways in which organizations can adapt their judgement processes to reduce the incidence of overconfidence, highlighting some real-world case studies. It ends with some observations and suggestions for future research in this complex area.

This entry was originally published on Palgrave Connect under ISBN 978-1-137-49190-9. The content has not been changed.

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Acknowledgements

We thank Barbara Mellers and Don Moore for their helpful feedback. Josh Klayman and Jack Soll are especially thanked for their thorough reviews which added valuable insights and extensions.

Author information

Authors and Affiliations

  1. Samuel Curtis Johnson Graduate School of Management, 443 Sage Hall, Ithaca, 14853-6201, USA

    J. Edward Russo

  2. Wharton – University of Pennsylvania, Conshohocken, PA, 19428, USA

    Paul J. H. Schoemaker

Authors
  1. J. Edward Russo
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  2. Paul J. H. Schoemaker
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Correspondence to J. Edward Russo .

Editor information

Editors and Affiliations

  1. Stanford University , Stanford, California, USA

    Mie Augier

  2. Tusher Ctr Intellectual Capital, University of California Tusher Ctr Intellectual Capital, Berkeley, California, USA

    David J. Teece

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Russo, J.E., Schoemaker, P.J.H. (2016). Overconfidence. In: Augier, M., Teece, D. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-94848-2_323-1

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  • DOI: https://doi.org/10.1057/978-1-349-94848-2_323-1

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-94848-2

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