CQ 2: Is it problematic when entrepreneurs start with unrealistic expectations?
3 important questions on CQ 2: Is it problematic when entrepreneurs start with unrealistic expectations?
What 3 related judgement biases does overconfidence compromise?
- Overestimation refers to 'overestimation of one's actual performance'
- Overplacement to 'overplacement of one's performance relative to others'
- Overprecision to 'exessive precision in one's beliefs'
What is systematic bias?
Sometime beneficial ('keeps you going'), but often bad...
Most people are overconfident, so what matters mostly is how overconfident you are relative to others
- Overconfidence is greatest for difficult tasks, for forecasts with low predictability, and for undertakings lacking fast, clear feedback
Most people are overconfident, so what matters mostly is how overconfident you are relative to others
What may overconfidence may help to explain? (3)
- Why many new businesses fail shortly after start-up
- Why entrepreneurship is a career choice with relatively low returns
- although there are 'superstars'
- Why risk-return relationship of investment into private enterprises is inferior to publicly traded equity
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
