Overconfidence and Increased Corporate Investment Volatility Andreas Mueller Discussant Samir srairi OBJECTIVES Influence of managerial overconfidence on investment decision. Impact of overconfidence during the different phases of the business cycle. Specification of the Empirical Models Model 1 Investment = f (Profitability, Cash Flow) Model 2 Investment = f (Profitability,Business Cycle) Model 3 Investment = f (Profitability,Business Cycle, Overconfidence, interaction between Over. and BC) Empirical Results Corporate investment depend on profitability and CF. Investment decisions are also influenced by a cash cycle over the phases of economic development. Managerial confidence affects corporate investment depending on the phase of the business cycle: overconfidence increases investment during upswing phase, but has no effect during Downturns. Strengths of paper A topical issue, paper explains the research topic very well. Well structured and Written. Based on several theories (neoclassical, agency, asymmetric information,...). Large period (10 years): analysis over time. Adequate sample size. Models: very well described and explained Suggestions to more explain the definition of overconfidence and particularly the different measures of overconfidence (introduction). to transfer 2 paragrahs about limitations of paper and further research from section 5 discussion to conclusion. to test if we obtain the same results if we use fixed effect or random effect models. to add some variables related to the characteristics of firm (size, ownership structure,..) in the vector of control variables. Questions What are the variables that influence overconfidence? (neither educational background nor age influence overconfidence). The results are specifically to German companies, it is possible to generalize results to others countries? The business of company does it influence the results?