The curse of knowledge increases self-selection into competition: Experimental evidence

The psychology literature provides ample evidence that people have difficulties taking the perspective of less informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader context, the results provide an explanation for the overconfidence of nascent entrepreneurs and the substantial rate of failure among new businesses.

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Year of publication:	2014
Authors:	Danz, David
Publisher:	Kiel und Hamburg : ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Subject:	curse of knowledge \| hindsight bias \| information projection \| overconfidence \| sorting \| incentive schemes \| competition \| beliefs \| experiments

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Series:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Behavioral Economics ; D10-V2
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	819697583 [GVK] hdl:10419/100543 [Handle] RePEc:zbw:vfsc14:100543 [RePEc]
Classification:	C91 - Laboratory, Individual Behavior ; D80 - Information and Uncertainty. General ; D82 - Asymmetric and Private Information ; D83 - Search, Learning, Information and Knowledge ; D84 - Expectations; Speculations
Source:	EconStor

Persistent link: https://www.econbiz.de/10010396967