Illusion of control in farmers’ investment and financing decisions

Purpose People’s tendency to overestimate their ability control random events, known as illusion of control, can affect financial decisions under uncertainty. This study developed an artifactual field experiment on for a farm machinery investment. Design/methodology/approach In with two treatments, the individual farmer was either given or not sense over outcome. After each decision, authors elicited perceived and questionnaire collected additional indirect measures from 78 German farmers 10 advisors. Findings The results did support preregistered hypotheses presence control. null result robust multiple outcomes model specifications. findings demonstrate that cognitive biases may be small difficult replicate. Research limitations/implications sample is representative farming population. discuss why estimated treatment effect represent lower bound true effect. Originality/value Illusion well-studied in laboratory settings, but little about extent which farmers’ behavior influenced by