Executive Condence and New CEO Selection

  title={Executive Condence and New CEO Selection},
  author={Suman Banerjee and Lili Dai and Mark L. Humphery-Jenner and Vikram Nanda},
Does a senior-executive’s confidence-level affect the likelihood of being promoted to CEO? Prior literature suggests CEOs tend to be overconfident and that, in certain situations, overconfidence can enhance firm-performance. Using an option-based overconfidence-measure, we show overconfident-senior-executives are more likely to be promoted. Firms that are candidates for a change in strategy (i.e., mature, low-risk firms) tend to appoint overconfidentexecutives and benefit in terms of improved… Expand
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