{"id":1990,"slug":"camerer-lovallo-1999-excess-entry","title":"Camerer & Lovallo 1999 — excess entry driven by overconfidence about RELATIVE skill","kind":"reference","scope":"business","status":"current","audiences":["kevin","candid-team"],"topics":["entrepreneurial-overconfidence"],"reference_body":"**Claim:** Camerer & Lovallo (1999, *American Economic Review*, \"Overconfidence and Excess Entry\") demonstrated experimentally that excess market entry is driven by overconfidence about **relative** skill, and that entry was **highest when participants knew success depended on skill and self-selected in** — \"reference-group neglect\": entrants ignore that competitors also self-selected.\n\n**Source:** Camerer & Lovallo 1999, AER. Experimental.\n\n**Confidence:** Verified.\n\n**Why this matters for Candid:** Most SMB owners who use the widget are already self-selected entrants. The bias is structural: they will under-weight competitors who also chose to enter. The widget's competitor-counting tasks ([[live-serp-counting-task]]) directly attack this by making the competitor pool visible and concrete.","rationale_body":null,"metadata":null,"links":{"outgoing":[],"incoming":[{"slug":"research-brief-smb-widget-capture-layer-june-2026","title":"Research brief: SMB widget capture layer — what owners can vs cannot self-report (June 2026)","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"cain-moore-haran-2015-overplacement-drives-entry","title":"Cain, Moore & Haran 2015 — OVERPLACEMENT (not absolute confidence) drives entry; easy markets pull entrants in","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"cannot-rate-competitive-comparison-abstract","title":"CANNOT — \"How do you compare to your competitors?\" (abstract → max overplacement)","kind":"reference","scope":"business","link_type":"depends-on"}]},"created_at":"2026-06-23T19:16:00.878Z","updated_at":"2026-06-23T19:16:00.878Z"}