Overconfidence in Strategic Decisions: Between Intuition and Rationality

This paper aims to analyse two important strategic decision-making processes (SDMP), such as International Market and Entry Mode Selection, within international small businesses. In particular, the influence of the decision-makers’ overconfidence on intuition, as well as on the international performance, has been examined. Moreover, the study investigates the possible mediating effect of the intuition construct on the relationship between overconfidence and international performance. A hierarchical regression analysis was adopted on a sample of Italian small and medium-sized enterprises. Results show a negative relationship between intuition and international performance and a positive one between overconfidence and international performance. Furthermore, a negative relation between overconfidence and intuition has been identified. Findings also highlight the mediating role of intuition in the relationship between overconfidence and international performance. The work also underlines theoretical and managerial implications.