TY - JOUR
AU - Lovallo, Dan
AB -  Overconfidence and Excess Entry: An Experimental Approach By COLIN CAMERER AND DAN LOVALLO * Psychological studies show that most people are overconfident about their own relative abilities, and unreasonably optimistic about their futures (e.g., Neil D. Weinstein, 1980; Shelly E. Taylor and J. D. Brown, 1988). When assessing their position in a distribution of peers on almost any positive trait—like driving ability (Ola Svenson, 1981), income prospects, or longevity—a vast majority of people say they are above the average, although of course, only half can be (if the trait is symmetrically distributed).1 This paper explores whether optimistic biases could plausibly and predictably influence economic behavior in one particular setting— entry into competitive games or markets. Many empirical studies show that most new businesses fail within a few years. For exam- * Camerer: Division of the Humanities and Social Sciences 228-77, California Institute of Technology, Pasadena, CA 91125 ( e-mail: camerer @hss.caltech.edu ) ; Lovallo: Wharton School, University of Pennsylvania, Philadelphia, PA 19104. Help and comments were received from Daniel Kahneman, Marc Knez, Matthew Rabin, David Teece, Dick Thaler, participants at the MacArthur Foundation Preferences Group, the 1995 J/ DM Society, workshops at the Universities of Chicago and Colorado, 
TI - Overconfidence and Excess Entry: An Experimental Approach
JF - American Economic Review
DO - 10.1257/aer.89.1.306
DA - 1999-03-01
UR - https://www.deepdyve.com/lp/american-economic-association/overconfidence-and-excess-entry-an-experimental-approach-RDvLYII013
SP - 306
EP - 318
VL - 89
IS - 1
DP - DeepDyve
ER -