Corpus ID: 2172997

On the Evolution of Overconé dence and Entrepreneurs

  title={On the Evolution of Overcon{\'e} dence and Entrepreneurs},
  author={A. Bernardo and I. Welch},
  • A. Bernardo, I. Welch
  • Published 2001
  • Economics
  • This paper explains why seemingly irrational overcone dent behavior can persist. Information aggregation is poor in groups in which most individuals herd. By ignoring the herd, the actions of overcone dent individuals (“ entrepreneurs” ) convey their private information. However, entrepreneurs make mistakes and thus die more frequently. The socially optimal proportion of entrepreneurs trades off the positive information externality against high attrition rates of entrepreneurs, and depends on… CONTINUE READING
    Herd Behavior and Cascading in Capital Markets: A Review and Synthesis
    • 419
    • PDF
    Entrepreneurial Optimism and Survival
    • 21
    • PDF
    Does the Better-than-Average Effect Show that People are Overconfident?: Two Experiments
    • 37
    • PDF
    Can cognitive biases explain venture team homophily
    • 30
    • PDF
    Opportunity Cost of Capital for Venture Capital Investors and Entrepreneurs
    • 107
    • PDF
    Equilibrium Stock Return Dynamics Under Alternative Rules of Learning About Hidden States
    • 55
    • PDF
    Evolution and the Growth Process: Natural Selection of Entrepreneurial Traits
    • 80
    • PDF
    The entrepreneur from a cognitive approach.
    • 78
    • PDF


    Publications referenced by this paper.
    Sequential Sales, Learning, and Cascades
    • 1,100
    Volume, Volatility, Price, and Profit When All Traders Are Above Average
    • 1,487
    • Highly Influential
    • PDF
    A Simple Model of Herd Behavior
    • 4,981
    • PDF
    On the Survival of Overconfident Traders in a Competitive Securities Market
    • 239
    • PDF
    Information Cascades in the Laboratory
    • 744
    • Highly Influential
    • PDF
    A Theory of Overconfidence, Self-Attribution, and Security Market Under- and Over-Reactions
    • 295
    A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades
    • 5,449
    • PDF
    Financial Decision-Making in Markets and Firms: A Behavioral Perspective
    • 642
    • PDF
    The Survival of Noise Traders in Financial Markets
    • 651
    • PDF