When CEOs are paid the outrageous salaries, stock options and other perks for the success of a business really attributable to the rank and file of course they see themselves as some sort of demi-gods.
I've only seen a handful of truly courageous business decisions by CEOs when they had to know they were risking their reputations and the future of their companies on their decisions and on "luck" but made those decisions after careful analysis and consideration. I could be wrong but I don't believe inflated egos or managerial overconfidence played a part in those decisions.
The thumbs up to build the Airbus A380 comes to mind.
The authors explore one such bias -- managerial overconfidence -- and find evidence suggesting CEOs develop overconfidence through 'self-attribution bias' when making merger and acquisition decisions. Individuals subject to self-attribution bias overcredit their role in bringing about good outcomes and underestimate the role of luck.
Consistent with this, they find that CEOs appear to overly attribute their role in successful deals, leading to more deals even though these subsequent deals are value destructive.
They also find evidence that CEOs alter their stock holdings prior to deals in a pattern consistent with overconfidence in the outcome of these subsequent deals. [emphasis mine]
Uh, isn't altering their stock holdings when the CEOs can be effecting (or rejecting for that matter) a merger or acquisition de facto insider trading? Just asking.
Note: Headline links to source.