self-survivor bias

the egotistic phallacy/self-survivor bias at work !! .....

http://www.american.com/archive/2006/november/the-young-economist-1

Malmendier has extended her method well beyond the weight room—notably, into the boardroom. In her paper “Who Makes Acquisitions? CEO Overconfidence and the Market’s Reaction,” she asked why so many corporate CEOs, in making acquisitions, “overpay for target companies and undertake value-destroying mergers.” The study looked at simple overconfidence, especially when companies have abundant internal funding, as the answer.

“If you’re CEO of a top company, you’ve had a lot of success in your life...otherwise you wouldn’t be there. So maybe you tend to overestimate that everything you touch turns to gold,” says Malmendier. “They just truly believe it’s a good merger, and it’s not surprising that they do, given that everything else went so well in the past.”