*2.1. Core-Self Evaluation*

Judge et al. (1998) distinguished four components (also called *dispositions*) as being the foremost examined in industrial psychology since the 1960s: (i) Self-Esteem—the general esteem an individual has with respect to himself/herself; (ii) generalized Self-E fficacy—the self-estimation of being successful; (iii) Locus of Control—the conviction in controlling life's variables; and (iv) Emotional Stability—the capacity to maintain a low neuroticism level. These four dispositions have been broadly illustrated as influencing decision-making processes; for example, in job interviews, the self-esteem of candidates was found to be an indicator of work execution (Hollenbeck et al. 1988); this is because candidates with high self-esteem are considered as having control of circumstance (Silvester et al. 2002). Moreover, Judge and colleagues illustrated that the four highlighted components are altogether inter-related and can be translated as a special degree of core (fundamental) evaluations (CEs) that individuals make

about others, the world and themselves (in this final case they are called core self-evaluations; CSE) (Judge et al. 1998; Judge and Bono 2001). In practice, the individual who assesses himself/herself extremely high in these four predispositions is certain of his/her capabilities and is predicted to make successful decision-making processes as well as have positive job and life satisfaction (Judge and Bono 2001).

The CE construction encourages the examination of the 'human factor' within the work environment (Judge et al. 2009). From that, researchers distinguished significant scores in CE as being related to high scores in work interest (Erez and Judge 2001), career accomplishment, objective achievement, wage, and job-related status (Judge and Hurst 2008). In practice, this concept illustrated that individuals who are exceedingly sure in their claim capacities and make a maintained exertion over time towards their objectives (in life and at work), are motivated to achieve e ffective results in their career by picking up noteworthy compensations and prestigious positions in society (Cristofaro 2017b).

However, managemen<sup>t</sup> scholars interested in the consideration of the self-concept and the impact on decision-making processes contended that CSE ought to be accepted as a powerful, confirmed umbrella that is created to investigate the executive self-concept. In fact, a really high level of CSE (or hyper-CSE) borders closely with what is regularly, colloquially, called "hubris" (Hiller and Hambrick 2005). In particular, Hiller and Hambrick (2005) investigated the links between executive peculiarities and components of organizational strategy, structure, and execution; from that, they expect that hyper-CSE executives—who have preeminent levels of self-confidence, self-potency, and conviction that they will prevail—will show this characteristic in their work behaviors. For example, they state that managers with high values of CSE are beyond any doubt about their capacities, and they consider profoundly that the application of their capacities will bring positive results. They are free of apprehension and have little concern regarding negative results since they have the conviction that they can overcome di fficulties and solve all issues. In short, hyper-CSE executives are sure they will prevail in the work environment as well as in society.

Among the few scholars that empirically investigated CSE in business settings, the work of Nag et al. (2020) is worthy of notice. These scholars are interested in understanding the drivers of SMEs' development whilst competing in declining businesses. In particular, Nag et al. (2020) research looks at how CEO scanning behaviors—investigated in terms of scanning intensity and proactiveness—influence self-e fficacy and, in turn, influence firm innovation and performance. Results showed that scanning intensity is emphatically related with self-e fficacy; in addition, these scholars reinforced the idea for an arbitrative relationship in which CEO self-e fficacy moderates the impact of scanning intensity on SME execution and development.

Finally, similarly to the CSE, Zell et al. (2020) introduced the concept of BTAE (Better-Than-Average-E ffect), conceptualized as the propensity of individuals to see their capacities, traits, and identity characteristics as predominant compared with their normal peer. They displayed an exhaustive meta-analysis of BTAE investigation, collecting information from 124 scientific empirical articles, including 291 hypothesis tests on more than 950,000 people. Results advised that the BTAE is related with self-esteem and life fulfillment—so, hypothesizing an overlap between CSE and BTAE.

### *2.2. System Thinking, Biases and Overconfidence*

'Biases' are deviations from rational choice, and this umbrella term has been used over time for substantiating both cognitive traps (i.e., mental errors) and heuristics (i.e., cognitive shortcuts) (Cristofaro 2017a, 2018). The first group of biases has been initially and formally defined by Hammond et al. (1998), inspecting cognitive errors behind executive choices. The second specifically comes from the program, primarily conducted through laboratory experiments of Kahneman and Tversky in the 70s on heuristics: rules that are deliberately, or not, used when choice conditions are dubious or complex (due to the massive or scarce amount of information) (Kahneman and Tversky 1974, 1979). However, these shortcuts were expected to be connected with the functioning of the human mind. In fact, Kahneman (2003)—the main theorist of the so-called

*dual process theory*—described human cognition as working according to two diverse Systems of our intellect: System 1, deputed to cognitive activities that are quick and programmed, and System 2, committed to cognitive activities that are "consciously observed and purposely controlled" (Kahneman 2003, p. 698). From this explanation, System 1 is the primary to be stimulated during our day-by-day tasks; so, human reasoning depends on heuristics for most of our mental procedures (Kahneman 2011).

However, traps and heuristics bring distinctive results on decision making: continuously negative for traps and positive or negative for heuristics. Undoubtedly, despite heuristics having been firstly conceived as the second-best choice approach (Kahneman et al. 2011), the *ecological rationality* aspect of heuristics has assumed and demonstrated as bringing, under some conditions, better choices than would be the case if decision makers utilized one of the more complicated strategies to make a choice (e.g., logistic regression; Luan et al. 2019).

Among traps, one of the most studied has been the overconfidence trap, defined by Bazerman and Moore (2013) as the "mother of all biases", since it activates other biases with dramatic consequences on the entire decision-making process (Abatecola et al. 2018). Overconfidence is the circumstance in which people tend to be overbearing regarding the accuracy of their judgments and it has been found in numerous settings (Cain et al. 2015; Gudmundsson and Lechner 2013). For example, Shiller (2005) illustrates that the stock markets were overestimated both in the case of the dot-com and real estate bubbles, primarily due to the executives' overconfidence in getting large returns, which progressively pushed to bring back and collect only corroborative data. Yet, Chen et al. (2015) examined how overconfidence may happen when executives make a corporate's profit projections. Examining the contrast between, at least, two large companies' earning estimations, made by 217 CEOs in a 14-year time span (1994–2008), Chen and colleagues identified significant steady outcomes about their assumption of the fact that CEOs with more prominent overconfidence are safe against strong remedial criticism. However, as Park et al. (2011) clarified, CEO overconfidence may be crucially decided by high levels of adulation, in terms of approbation and reaction similarity (or affirmation) from other members of the board of directors. These scholars explored this aspect through investigating 451 CEOs of US corporations and 3135 other executives. The outcomes completely bolster the initial theories that CEOs with a high social status are emphatically related with CEO overconfidence; this give-and-take brings a slight recognition of the need to modify procedures in return for mediocre conduct.

Studies on overconfidence have been massive and they have not followed, as demonstrated, the same conceptualization and operationalization of overconfidence. In this vein, Moore and Healy (2008) synthesized these different approaches within three clusters of how overconfidence has been investigated: (i) overestimation of one's substantial conduct (the majority of studies adopted this definition), (ii) overplacement of one's conduct relative to others, and (iii) extreme accuracy in one's convictions. Empirical evidence displays that the inversions of the first two (apparent underconfidence) tend to differently influence organizational tasks. On the one hand, for severe tasks, individuals overestimate their real performance, but also erroneously accept that they are less effective than others; on the other hand, for simple assignments, individuals underestimate their real performance but erroneously believe they are better than others.

From the aforesaid, overconfidence has a grea<sup>t</sup> impact on managemen<sup>t</sup> decisions and, because of that, scholars have tried to explain whether there are some personal and/or contextual variables that may foster or reduce it. In this regard, Croskerry and Norman (2008) found, for example, that overconfidence is related with evidence favoritism—thus, the confirmation bias. In their study of clinical decision making, overconfidence has been generally found acting as deferring and/or missing necessary analysis, highlighting the catastrophic impacts of this decision behavior. In addition, Mata et al. (2013) studied whether the thinking mode—deliberative versus intuitive—that individuals utilize to figure out a dilemma or make a judgment impacts the mindfulness of decision makers' claims and others' conduct. Findings show that contemplative thinkers had a metacognitive superiority over instinctive thinkers. Deliberative individuals are aware of both the deliberative arrangemen<sup>t</sup> and the instinctive alternative; realizing that the deliberative arrangemen<sup>t</sup> is superior, they are likely to feel

surer and be more precise in how they evaluate their execution. Instinctive thinkers, on the other hand, are aware only about the instinctive explanation; they know only this option, so they are unconcerned of how unaware they were of their conduct and how they rank in relation to others.
