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.

MoreLess

Year of publication:	2014
Authors:	Danz, David
Publisher:	Berlin : Wissenschaftszentrum Berlin für Sozialforschung (WZB)
Subject:	curse of knowledge \| hindsight bias \| information projection \| overconfidence \| sorting \| incentive schemes \| competition \| beliefs \| experiments

More details

Series:	WZB Discussion Paper ; SP II 2014-207
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	796700478 [GVK] hdl:10419/101453 [Handle] RePEc:zbw:wzbmbh:SPII2014207 [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://ebvufind01.dmz1.zbw.eu/10010397879