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The Impact of Overconfidence Bias on Strategic Decision-Making

Till Ebeling, Maximilian LU and Montesinos Martinez, Miguel LU (2025) MGTN59 20251
Department of Business Administration
Abstract
Strategic decision-making (SDM) is a core function of managerial roles, often carried out under pressure, uncertainty, and cognitive limitations. This thesis explores how overconfidence bias affects strategic decision-making in organisational settings. While cognitive biases have been extensively studied in psychology and behavioural economics, the specific impact of overconfidence on business-related strategic decisions has received limited empirical attention.
By using an experimental vignette method, this study investigates how overconfidence bias influences the strategic decision-making of business students. The results indicate that participants influenced by overconfidence bias significantly make different decisions compared to... (More)
Strategic decision-making (SDM) is a core function of managerial roles, often carried out under pressure, uncertainty, and cognitive limitations. This thesis explores how overconfidence bias affects strategic decision-making in organisational settings. While cognitive biases have been extensively studied in psychology and behavioural economics, the specific impact of overconfidence on business-related strategic decisions has received limited empirical attention.
By using an experimental vignette method, this study investigates how overconfidence bias influences the strategic decision-making of business students. The results indicate that participants influenced by overconfidence bias significantly make different decisions compared to those deciding under more neutral conditions. Those findings underscore the importance of metacognitive awareness in fostering more deliberate and balanced strategic choices. Given the subtle nature of such biases, their effects often go unnoticed, highlighting the need for a deeper
reflection on how to make well-balanced strategic decisions. (Less)
Please use this url to cite or link to this publication:
author
Till Ebeling, Maximilian LU and Montesinos Martinez, Miguel LU
supervisor
organization
course
MGTN59 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
strategic decision-making, rationality, bounded rationality, dual-process theory, heuristics, overconfidence bias, quantitative method, vignette study
language
English
id
9206241
date added to LUP
2025-06-27 14:17:00
date last changed
2025-06-27 14:17:00
@misc{9206241,
  abstract     = {{Strategic decision-making (SDM) is a core function of managerial roles, often carried out under pressure, uncertainty, and cognitive limitations. This thesis explores how overconfidence bias affects strategic decision-making in organisational settings. While cognitive biases have been extensively studied in psychology and behavioural economics, the specific impact of overconfidence on business-related strategic decisions has received limited empirical attention.
By using an experimental vignette method, this study investigates how overconfidence bias influences the strategic decision-making of business students. The results indicate that participants influenced by overconfidence bias significantly make different decisions compared to those deciding under more neutral conditions. Those findings underscore the importance of metacognitive awareness in fostering more deliberate and balanced strategic choices. Given the subtle nature of such biases, their effects often go unnoticed, highlighting the need for a deeper
reflection on how to make well-balanced strategic decisions.}},
  author       = {{Till Ebeling, Maximilian and Montesinos Martinez, Miguel}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Impact of Overconfidence Bias on Strategic Decision-Making}},
  year         = {{2025}},
}