Assume you are an overconﬁdent manager. You are most apt to do which one of the following more so than you would if you were not overconﬁdent?
A) Research a project more thoroughly before committing funds to commence it.
B) Accept risky projects that turn out to be less proﬁtable than you expected.
C) Wait until new technology proves its worth before incorporating it into your ﬁrm's operations.
D) Avoid mergers and acquisitions.
E) Invest excess company cash more conservatively than your peers at other ﬁrms.

Question

Quizplus · Accepted Answer

Overconfident managers tend to underestimate risks and overestimate their own abilities, leading them to accept risky projects that may not turn out as profitable as expected. They may also be more likely to ignore warning signs and continue with a project despite evidence that it is failing. Therefore, option B is the best answer.

Assume You Are an Overconﬁdent Manager