Am I Better than You? The Roles of Hubris and Comparative Optimism in CEO Decision Making.
By Tim R. Holcomb Dr., Certo, S.T., DeNisi, A.S.
2005
Abstract
Although research in strategic management has generally ascribed a key role for the firm’s chief executive officer (CEO), there has been only limited research dealing with biases that might influence CEO decisions. We integrate literature in strategic management dealing with CEO hubris and research in social psychology regarding comparative optimism (sometimes referred to as unrealistic optimism) to develop a theory and related propositions regarding the roles of hubris and comparative optimism in CEO decision making. Specifically, we frame the effects of hubris on comparative optimism, differentiate this bias from other similar behavioral constructs, and then propose a series of personal and situational factors that might influence the effects of comparative optimism on CEO decision making.