Two Sources of Overconfidence: Incorporating Disconfirming Feedback in an Entrepreneurial Context

The prevalence of overconfidence when making entrepreneurial decisions has led some scholars to argue that it has positive ramifications while others to disagree. The question is: Will highly overconfident individuals who consider starting a venture be willing to correct initial misconceptions? We found that it depends upon the source of overconfidence. Even at equally high overconfidence levels, individuals who reached that level by intentionally processing additional evidence were less likely to revise erroneous beliefs when compared to those with a natural tendency toward high overconfidence. In contrast to the overconfidence source, overconfidence level was not associated with changing incorrect beliefs.