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

by David Danz

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 ; Rev.
Authors:	Danz, David
Publisher:	Berlin : WZB
Subject:	curse of knowledge \| hindsight bias \| information projection \| overconfidence \| sorting \| incentive schemes \| competition \| beliefs \| experiments \| Experiment \| Theorie \| Theory \| Wettbewerb \| Competition \| Asymmetrische Information \| Asymmetric information \| Informationsökonomik \| Economics of information \| Entscheidung \| Decision \| Wissensmanagement \| Knowledge management \| Wissen \| Knowledge \| Kognition \| Cognition \| Vertrauen \| Confidence

Extent:	Online-Ressource ([1], 64 S.) Ill., graph. Darst.
Series:	Discussion paper / Social Science Research Center Berlin (WZB), Research Area Markets and Choice, Research Unit Market Behavior. - Berlin : WZB, ZDB-ID 2688101-9. - Vol. SP II 2014-207
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Parallel als Druckausg. erschienen Systemvoraussetzungen: Acrobat Reader
Other identifiers:	hdl:10419/101453 [Handle]
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:	ECONIS - Online Catalogue of the ZBW

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