Journal Article
Overconfidence and Risk-taking in the Field: Evidence from Ethiopian Farmers
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Publication Date
DOI
10.1086/713933
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Related Topics
Emerging Markets & Developing Countries
Africa
We argue that overconfidence wrongly inflates the expected returns to a risky income-generating activity. Overconfidence thus increase the willingness to take risks. We test this prediction using a sample of small-holder farmers from Ethiopia who face a risk-return tradeoff in their crop cultivation choices. To meet their subsistence needs, these risk-averse farmers arguably have large incentives to wisely manage their risks ...
