Managers Overconfidence On The Influence Of The Investment Decisions

In the traditional economics theory, many main theories are based on "economicman hypothesis" the premise that human behavior is reasonable. However, in real life,but often find enterprise the manager’s decision when the irrational behavior, this kindof phenomenon and theory is not a match, in order to let the theory to be able to betterexplain actual phenomenon, so will the psychology into economics, and explain thephenomenon of irrational behavior economics is made. In the behavior of theeconomics and psychology theories and ideas, overconfidence is human economicbehavior of a psychological phenomenon. In the enterprise management process, theenterprise management decision-making behavior has been influence enterprisewhether sustainable management of important factor. Therefore, the managers of thestudy is to overconfidence is important.According to the relevant literature and theoretical research,the paper is going toanalyze enterprise managers of overconfidence of psychology of enterpriseinvestment decision-making influence, this paper puts forward the researchhypotheses, and to the listed companies in China as the research object, borrows byempirical research method of the research to explore managers overconfidence on theinfluence of the enterprise investment decisions. The research findings show thatenterprise managers of overconfidence and enterprise investment to produce positiveinfluence on, but with the return on investment is present negative. Enterprisemanagers will often take overconfidence expand liabilities to expand enterpriseinvestment scale, they thought it could take more lucrative for enterprise and makethe enterprise value increased. But, the results of the study show that is not the case,the enterprise return on investment therefore didn’t increase, instead ofoverconfidence because the management level increases the return on investment isinstead has a negative effect on the, the profit ability and therefore has a negativeeffect on. Through the managers overconfidence on enterprise investment decision, webroaden the research scope of the enterprise investment decisions, and probes into thelisted company irrational financing behavior, regulating the governance structure ofthe enterprise under special investment decision model, reveals some classical theorycannot reveal problems, at the same time on how to strengthen the supervision andguidance to managers, reduce managers don’t provide reference for rational behavior.