Survey of Overconfidence Bias and EntrepreneursDecision-Making Process in Maiduguri, BornoState, Nigeria

Abstract

                        Abstract

The objective of this study is to examine the influence of overconfidence bias on
entrepreneurs’ decision-Making process in Maiduguri Metropolitan Council, Borno State,
Nigeria. Questionnaires were used to collect primary data from entrepreneurs. The
population of the study was 1450, sample sizes of 305 respondents were used and simple
linear regression was used with the aid of SPSS version 25 for data analysis. The findings
from the regression analysis show that overconfidence bias significantly influences
entrepreneurial decision-making process at 0.012 levels of significant. Therefore, this
study concludes that most of the entrepreneur’s overestimate which make them to think
that they better than where they are by trading more in the market because they believe that
for sure there will be positive outcome in the near future. This study recommends that
entrepreneurs can become aware of their psychological dispositions and set up counter
balancing or self-regulatory mechanisms. Such mechanisms could be awareness of
decision biases through training that involve selecting staff with different dispositions as a
balancing act in order to avoid overestimation, over placement and over precision. The
results of the study would also be relevant to policy makers for more effective economic
and financial policies; this research provides policymakers with insights into the
transmission mechanisms of monetary policy within the state. This knowledge will assist
policymakers in taking into account global economic considerations when drafting
monetary and fiscal policies, which will be necessary for executing monetary policies that
support larger economic goals while limiting unexpected repercussions in financial
markets. The research findings can be utilized by policy makers to refine regulatory
actions. In order to preserve SMEs owners’ protection and market stability, policymakers
can foresee potential behavioural biases that cause weaknesses in the market, it can put
regulations in place to lessen these biases, systemic risks and stop excessive market
volatility