Empirical Research On Self-repair Overconfidence Of Managers In Social Network

Psychologists study shows that most people from all walks of life tend to overestimate knowledge and the accuracy of the information.Therefore,they have cognitive bias of overconfidence.Managerial overconfidence is overestimating their ability and knowledge in making investment and financing company strategic decisions.Other accepts of managerial overconfidence,which includes overvaluing the probability of success and underestimating the risk level,lead to the cognitive bias.Managerial overconfidence on enterprise investment decisions,financing behavior and enterprise merger and acquisition activities will have a negative impact.Therefore,it is an urgent problem for management practice to repair managerial overconfidence cognitive bias.This thesis on the review of existing literature researches at home and abroad,finds out the reasons of influencing managerial overconfidence,finding that managers’ learning behaviors can repair overconfidence psychological bias well.Based on social network theories,managers in the social network can have more learning opportunities.On the theories above,this thesis puts forward the research hypotheses,managerial network location and managerial overconfidence are negatively related and studies M&A history for the influence of the relationship between managerial overconfidence and managerial network location.Then,the variables are designed and models are constructed.This thesis which selects Shanghai and Shenzhen A-shares listed companies from 2014 data as samples,uses the UCINET software and the ACCESS database,finally builds managerial social network.Managerial overconfidence index as explained variables,managerial social network location index as explaining the variable and M&A history as adjustment variables,the thesis uses logistic regression method to research the relationship between managers of different network location and the overconfidence degree,and study M&A history for the influence of the relationship between managerial overconfidence and managerial network location.Finally,the thesis chooses another measurement of managerial overconfidence,further testing the relationship between managerial network location,the M&A history and managerial overconfidence.Managerial network location is significantly negatively correlated with managerial overconfidence,which reveals that the managers who are in the center of the network have a lower degree of overconfidence.Managerial network location and M&A history are significantly positively correlated with managerial overconfidence,which shows that the M&A history weakens the negative correlation between managerial network location and managerial overconfidence.This suggests that managers who have learning opportunities in the social network,can repair managerial overconfidence cognitive biases.This thesis expands the social network research new applications.