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Knowing when to quit: do optimism and overconfidence cloud inventor judgment?
This research brief explores how cognitive biases—specifically optimism, overconfidence, and the sunk cost fallacy—influence inventors' decisions to persist with projects despite negative feasibility assessments. Drawing from a study by Åstebro et al. (2007), which surveyed 730 Canadian inventors advised by the Inventors’ Assistance Program (IAP), the findings reveal that inventors exhibit significantly higher levels of optimism and overconfidence compared to the general population. Even when advised to discontinue their projects (75% of cases), inventors often ignored recommendations, continuing to invest time and resources. Notably, optimism played a stronger role for inventors facing unfavorable evaluations, while overconfidence led them to distrust external advice. The study also highlights the "irrational escalation of commitment," where inventors increased investments to justify prior decisions, akin to the gambler’s fallacy. Despite the low success rate of inventions (only 2% were profitable), cognitive biases drove perseverance, sometimes even among those who eventually succeeded (6.9%). The research underscores the challenges of balancing creativity with rational decision-making, suggesting that inventors and entrepreneurs could benefit from objective external evaluations to mitigate biases. These insights are critical for inventors, investors, and innovation support programs aiming to improve resource allocation and reduce wasteful expenditures in high-risk ventures.
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| AMP2104 | PSB lt.dasar - Pascasarjana | 1 |
| Penerbit | Briarcliff Manor, NY: Academy of Management 2007 |
|---|---|
| Edisi | Vol. 21, No. 4, Nov., 2007 |
| Subjek | Optimism Bias Cognitive biases inventor judgment sunk cost fallacy innovation persistence feasibility assessment |
| ISBN/ISSN | 15589080 |
| Klasifikasi | NONE |
| Deskripsi Fisik | 3 p. |
| Info Detail Spesifik | Academy of Management Perspectives |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas |