This paper empirically investigates the relationship between managerial overconfidence and write-offs following CEO turnover. Incoming CEOs often engage in big bath accounting as they dispose of poorly performing projects. Overconfident managers overestimate their abilities and consequently have upwardly biased expectations concerning future firm performance. I hypothesise that overconfident CEOs are less likely to engage in a big bath following managerial change. The empirical results confirm this hypothesis by showing that big baths at CEO turnover are significantly less frequent among overconfident CEOs.

中文翻译：

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大洗礼和首席执行官过度自信

本文从实证角度研究了首席执行官离职后管理层过度自信与注销之间的关系。即将到来的首席执行官在处理业绩不佳的项目时通常会承担大量的费用。过度自信的经理人高估了他们的能力，因此对未来公司绩效的期望出现了偏差。我假设，过度自信的首席执行官不太可能在管理层变动后大刀阔斧。实证结果证实了这一假设，表明过度自信的首席执行官在CEO流动时大幅度洗礼的频率明显降低。