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July 2023
Article

Takahashi-Alexander Revisited: Modeling Private Equity Portfolio Outcomes Using Historical Simulations

By: Dawson Beutler, Alex Billias, Sam Holt, Josh Lerner and TzuHwan Seet

In 2001, Dean Takahashi and Seth Alexander of the Yale University Investments Office developed a deterministic model for estimating future cash flows and valuations for the Yale endowment’s private equity portfolio. Their model, which is simple and intuitive, is still... View Details

Keywords: Forecasting and Prediction; Investment Portfolio; Analytics and Data Science

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2023
Working Paper

Life After Death: A Field Experiment with Small Businesses on Information Frictions, Stigma, and Bankruptcy

By: Shai Benjamin Bernstein, Emanuele Colonnelli, Mitchell Hoffman and Benjamin Iverson

In a randomized control trial (RCT) with U.S. small businesses, we document that a large share of firms are not well-informed about bankruptcy. Many assume that bankruptcy necessarily entails the death of a business and do not know about Chapter 11 bankruptcy, where... View Details

Keywords: Small Business; Insolvency and Bankruptcy; Knowledge Dissemination; Outcome or Result

2022
Article

Leadership & Overconfidence

By: Don A Moore and Max H. Bazerman

Expressions of confidence can give leaders credibility. In the political realm, they can earn votes and public approval for decisions made in office. Such support is justified when the confidence displayed is truly a sign that a leader (whether a candidate or an... View Details

Keywords: Personal Characteristics; Leadership; Government Legislation; Political Elections

January–February 2015
Article

The Art of Giving and Receiving Advice

By: David A. Garvin and Joshua D. Margolis

The article looks at giving and receiving advice as an element of organizational leadership and managerial ability. It suggests that the skills related to these actions, such as self-awareness and diplomacy, are not innate talents but can be learned. It lists problems... View Details

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Article

Seeking the Roots of Entrepreneurship: Insights from Behavioral Economics

By: Thomas Astebro, Holger Herz, Ramana Nanda and Roberto A. Weber

There is a growing body of evidence that many entrepreneurs seem to enter and persist in entrepreneurship despite earning low risk-adjusted returns. This has lead to attempts to provide explanations—using both standard economic theory and behavioral economics—for why... View Details

Keywords: Entrepreneurship; Personal Characteristics; Attitudes; Behavior

May 2011
Article

Overconfidence by Bayesian Rational Agents

By: Eric J. Van den Steen

This paper derives two mechanisms through which Bayesian-rational individuals with differing priors will tend to be relatively overconfident about their estimates and predictions, in the sense of overestimating the precision of these estimates. The intuition behind one... View Details

Keywords: Decision Choices and Conditions; Forecasting and Prediction; Knowledge Acquisition; Risk Management; Prejudice and Bias

April 2011
Article

Why Leaders Don't Learn from Success

By: Francesca Gino and Gary P. Pisano

We argue that for a variety of psychological reasons, it is often much harder for leaders and organizations to learn from success than to learn from failure. Success creates three kinds of traps that often impede deep learning. The first is attribution error or the... View Details

Keywords: Learning; Innovation and Management; Leadership; Failure; Success; Performance Evaluation; Prejudice and Bias

2010
Working Paper

Overconfidence by Bayesian Rational Agents

By: Eric Van den Steen

This paper derives two mechanisms through which Bayesian-rational individuals with differing priors will tend to be relatively overconfident about their estimates and predictions, in the sense of overestimating the precision of these estimates. The intuition behind one... View Details

Keywords: Risk and Uncertainty; Measurement and Metrics; Game Theory; Forecasting and Prediction

September 2008 (Revised September 2010)
Exercise

Exercise on Estimation

By: Jason Riis and John T. Gourville

This exercise is meant to assess students' level of confidence around everyday business and general knowledge questions, for the purpose of identifying where they are overconfident and underconfident. View Details

Keywords: Decision Making; Forecasting and Prediction; Personal Characteristics