Market entry decisions: effects of absolute and relative confidence

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dc.citation.epage120en_US
dc.citation.issueNumber2en_US
dc.citation.spage113en_US
dc.citation.volumeNumber55en_US
dc.contributor.authorBolger, F.en_US
dc.contributor.authorPulford, B. D.en_US
dc.contributor.authorColman, A. M.en_US
dc.date.accessioned2016-02-08T10:09:27Z
dc.date.available2016-02-08T10:09:27Z
dc.date.issued2008en_US
dc.departmentDepartment of Psychologyen_US
dc.description.abstractIn a market entry game, the number of entrants usually approaches game-theoretic equilibrium quickly, but in real-world markets business start-ups typically exceed market capacity, resulting in chronically high failure rates and suboptimal industry profits. Excessive entry has been attributed to overconfidence arising when expected payoffs depend partly on skill. In an experimental test of this hypothesis, 96 participants played 24 rounds of a market entry game, with expected payoffs dependent partly on skill on half the rounds, after their confidence was manipulated and measured. The results provide direct support for the hypothesis that high levels of confidence are largely responsible for excessive entry, and they suggest that absolute confidence, independent of interpersonal comparison, rather than confidence about one's abilities relative to others, drives excessive entry decisions when skill is involved.en_US
dc.description.provenanceMade available in DSpace on 2016-02-08T10:09:27Z (GMT). No. of bitstreams: 1 bilkent-research-paper.pdf: 70227 bytes, checksum: 26e812c6f5156f83f0e77b261a471b5a (MD5) Previous issue date: 2008en
dc.identifier.doi10.1027/1618-3169.55.2.113en_US
dc.identifier.eissn2190-5142
dc.identifier.issn1618-3169
dc.identifier.urihttp://hdl.handle.net/11693/23140
dc.publisherHogrefe Publishingen_US
dc.relation.isversionofhttp://dx.doi.org/10.1027/1618-3169.55.2.113en_US
dc.source.titleExperimental Psychologyen_US
dc.subjectEntrepreneurial behavioren_US
dc.subjectMarket entry gameen_US
dc.subjectNash equilibriumen_US
dc.subjectOverconfidenceen_US
dc.subjectRisk takingen_US
dc.subjectDecision makingen_US
dc.titleMarket entry decisions: effects of absolute and relative confidenceen_US
dc.typeArticleen_US

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