International Academic Journal of Entrepreneurship

Motivated Attribution and Entrepreneurial Confidence

Published on: 2019-04-11

Abstract

In this paper, we argue that entrepreneurial overconfidence can be the result of pursuing self-motivation rather than a cognitive bias to be corrected, and we propose a particular mechanism for this process. Through a model of motivated attribution, we analyze the problem of agents who can use causal attribution to explain away bad signals about their ability to preserve self-confidence and commit to effort. This behavior can result in individuals reporting the receipt of past signals in an unbiased way while maintaining biased beliefs about their self-abilities. We provide testable implications of our model.

Keywords

Entrepreneurship; Overconfidence; Motivated beliefs; JEL classification: D82; D83