The curse of knowledge increases self-selection into competition : experimental evidence ; conference paper

Danz, David

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
Published in:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik Session: Behavioral economics ; V2
Publisher:	[Kiel : ZBW
Subject:	curse of knowledge \| hindsight bias \| information projection \| overconfidence \| sorting \| incentive schemes \| competition \| beliefs \| experiments