1
Q
Relationship Selfattribution and OC
A
succes is skill. Failure is external factors. Initial succes leads to more acquisition deals
2
Q
Do OC perform - alpha
A
No. Singles outperform. Short and long term
3
Q
Robustness checks
A
- Diversifying mergers: diversificating mergers destroys value. OC diversify more. Lower performance. High proportion % that div.
- acquisition char.: same result
- corporate governance: doesnt mitigate OC. Weak CG always underperforms regardless from (ir)rational investors.
- block ownership: shareholders monitor managers has important role but not sufficient to create superior performance.
- > OC have low BO
4
Q
Overconfidence (2)
A
- Overest current firm value : doesnt want to pay in stocks but cash - firm is now undervalued
- Overest synergy gains from merger and underest risk
