This article presents a review on how the optimism bias and overconfidence effects might affect the performance of an individual, and in particular, of a manager or a business owner. The former one appears to be an evolutionary adaptation responsible for a good mental health, and as such is being considered as one of the most consistent, prevalent, and robust biases documented in psychology and behavioral economics. Together with the latter one, these cognitive biases might result in persistent impression that chosen strategy is reasonable, even if a statistical evidence or past experience indicate the contrary. The paper also offers several ideas how to increase performance by reducing effects of an excessive optimism and confidence, even though sometimes just the mere awareness of them can do the trick.
Citation: Zíka, V., & Koblovský, P. Optimism bias and overconfidence effects in managerial decision making. 2016. Conference Paper.