The curse of knowledge increases self-selection into competition: Experimental evidence

Konferenzbeitrag

The psychology literature provides ample evidence that people have difficulties taking the perspective of less informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader context, the results provide an explanation for the overconfidence of nascent entrepreneurs and the substantial rate of failure among new businesses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Behavioral Economics ; No. D10-V2

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Information, Knowledge, and Uncertainty: General ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Expectations; Speculations
• Subject: curse of knowledge ; hindsight bias ; information projection ; overconfidence ; sorting ; incentive schemes ; competition ; beliefs ; experiments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Danz, David
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/100543
• Last update: 10.03.2025, 11:44 AM CET