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Cited by 538

The DOI matches its Crossref record; 64 of the 64 references it cites were found in a registry or an index.

Overconfidence, Compensation Contracts, and Capital Budgeting

GERVAIS, SIMON, HEATON, J. B., ODEAN, TERRANCE·2011·The Journal of Finance
DOI 10.1111/j.1540-6261.2011.01686.x
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Abstract

A risk‐averse manager's overconfidence makes him less conservative. As a result, it is cheaper for firms to motivate him to pursue valuable risky projects. When compensation endogenously adjusts to reflect outside opportunities, moderate levels of overconfidence lead firms to offer the manager flatter compensation contracts that make him better off. Overconfident managers are also more attractive to firms than their rational counterparts because overconfidence commits them to exert effort to learn about projects. Still, too much overconfidence is detrimental to the manager since it leads him to accept highly convex compensation contracts that expose him to excessive risk.

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Crossref · 10.1111/j.1540-6261.2011.01686.x

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Metadata

Authors
GERVAIS, S., HEATON, J. B., & ODEAN, T.
Venue
The Journal of Finance
Publisher
Wiley
Published
2011-09-21
Volume
66
Issue
5
Pages
1735-1777
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/j.1540-6261.2011.01686.x
OpenAlex
W2115464651
Cited by
538
References
64
FWCI
49.25
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Overconfidence, Compensation Contracts, and Capital Budgeting. https://app.cochat.ai/papers/10.1111/j.1540-6261.2011.01686.x
The paper
GERVAIS, S., HEATON, J. B., & ODEAN, T. (2011). Overconfidence, Compensation Contracts, and Capital Budgeting. The Journal of Finance. https://doi.org/10.1111/j.1540-6261.2011.01686.x

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.