We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Are Overconfident CEOs Born or Made? Evidence of Self-Attribution Bias from Frequent Acquirers.
- Authors
Billett, Matthew T.; Qian, Yiming
- Abstract
We explore the history of mergers and acquisitions made by individual CEOs. Our study has three main findings: (1) CEOs' first deals exhibit zero announcement effects while their subsequent deals exhibit negative announcement effects; (2) while acquisition likelihood increases in the performance associated with previous acquisitions, previous positive performance does not curb the negative wealth effects associated with subsequent deals; and (3) CEOs' net purchase of stock is greater preceding subsequent deals than it is for first deals. We interpret these results as consistent with self-attribution bias leading to overconfidence. We also find evidence that the market anticipates future deals based on the CEO's acquisition history and impounds such anticipation into stock prices.
- Subjects
CHIEF executive officers; RATING of executives; CONFIDENCE; HYBRIS (The Greek word); MERGERS &; acquisitions; INSIDER trading in securities; EXECUTIVE ability (Management) testing; STOCK prices
- Publication
Management Science, 2008, Vol 54, Issue 6, p1037
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.1070.0830