Events

Prof. Mathew Hayward
Professor
Monash University

We examine whether and how over-optimistic decision-making affects professionals’ short-term promotion prospects. Specifically, we study whether over-optimistic professionals are more likely to be promoted than more accurate and pessimistic ones. Because decision-making arises in a social context, we further examine institutional factors that moderate the link between over-optimistic judgment and promotion. Analyzing hand and machine-collected LinkedIn observations on sell-side security analysts’ promotions, we find that those making upside or optimistic errors in judgment tend to be promoted relative to those who are accurate (i.e., realists) and those who make downside errors in judgment (i.e., pessimists). Promotion tends to be even more likely when analysts comply with the normative expectations of their industry.