Overconfident CEOs over-estimate their ability to generate returns. Thus, on the margin, they undertake mergers that destroy value. They also perceive outside finance to be over-priced. We classify CEOs as overconfident when, despite their under-diversification, they hold options on company stock until expiration. We find that these CEOs are more acquisitive on average, particularly via diversi...

The purpose of the study is to extend further from the result studying overconfidence effects of CEOs on single deal of Malmendier and Tate (2008)’s article to study overconfidence effects of CEOs on multiple mergers and acquisitions. Based on the psychological and financial theories, the likelihood of overconfident CEOs acquiring a company is the net effect of two manifestations of overconfide...

Recent research has demonstrated that judgments of Chief Executive Officers' (CEOs') faces predict their firms' financial performance, finding that characteristics associated with higher power (e.g., dominance) predict greater profits. Most of these studies have focused on CEOs of profit-based businesses, where the main criterion for success is financial gain. Here, we examined whether facial a...

Visuo-haptic biases are observed when bringing your unseen hand to a visual target. The biases are different between, but consistent within participants. We investigated the usefulness of adjusting haptic guidance to these user-specific biases in aligning haptic and visual perception. By adjusting haptic guidance according to the biases, we aimed to reduce the conflict between the modalities. W...

Recent studies claim that visual perception of stimulus features, such as orientation, numerosity, and faces, is systematically biased toward visual input from the immediate past [1-3]. However, the extent to which these positive biases truly reflect changes in perception rather than changes in post-perceptual processes is unclear [4, 5]. In the current study we sought to disentangle perceptual...

I test theories of the recent financial crisis by studying how banks’ pre-crisis investments connect to their CEOs’ beliefs. Using different proxies for beliefs, I find banks with larger housing investments and worse crisis performance had CEOs who were more optimistic ex ante. Banks with the most optimistic CEOs experienced 20 percentage points higher real estate loan growth, and 15 percentage...

The mechanisms underlying the right hemisphere's dominance for spatial and attentional functions lacks a comprehensively explanation. For example, perceptual biases, as observed in line bisection and related tasks, might be caused by an attentional asymmetry or by perceptual processes such as a specialization of the left and right hemisphere for high and low spatial frequencies (SFs), respectiv...

With immediate repetition priming of forced choice perceptual identification, short prime durations produce positive priming (i.e., priming the target leads to higher accuracy, while priming the foil leads to lower accuracy). Many theories explain positive priming following short duration primes as reflecting increased perceptual fluency for the primed target (i.e., decreased identification lat...

Biases exist in many perceptual and cognitive functions. Since visual attention plays an important role in a wide range of perceptual and cognitive processes, any bias in the spatial distribution of attention is likely to be a significant source of perceptual and cognitive asymmetries. An attentional visual field task (AVF) requiring localization of a target among distractors was used to assess...