حسین علیدادی

The financial anomalies, which have brought about challenges for the nature of efficient-market hypothesis, provide ample experimental evidence on the deviation of market from rationality. According to the efficient-market hy-pothesis, investors avail themselves of all the information available in the market, and then attempt a thorough and painstaking interpretation of it. The empirical evidence, however, reveals that most investors fail to imple-ment rigorous information processing, thereby rendering to a number of behavioral theories concerning market inefficiency and biased information processing. The current research sets out to identify and scrutinize the im-pact of the CEO’s perceptual biases in judgment and economic decision-making on the reporting quality of the firms listed on the Tehran Stock Ex-change. The Purpose of this study CEO Overconfidence and Overinvestment by Role of Economic moderators Tehran Stock Exchange (TSE). One hun-dred five companies were selected as the sample size by systematic removal sampling reviewed in 2012-2019. Due to its dichotomous dependent variable, this study uses probit regression to test the research hypotheses. The results indicated the significant positive effect of CEO overconfidence on overin-vestment. It was also noted that Exchange Rate strengthens the positive effect of CEO overconfidence on overinvestment. Based on these results, the CEO's decisions as a decision-maker in charge of any company, especially under inflationary conditions, can play a substantial role in future corporate investment levels. The findings reveal that the indices of the CEO’s percep-tual biases in judgment and economic decision-making exert a significantly negative effect on financial reporting reliability and competitiveness.

Investment is seen as one of the most important and influential factors in economic growth and development. It is directly affected by managers' approaches to decision-making because identifying the best investment opportunities to achieve ideal returns is one of the expectations that shareholders and stakeholders have of managers to reduce agency gaps. However, the emergence of managers' overconfident behavior as a foundation for psychological bias can deepen the agency gap due to overestimating project cash flows compared to their real values under inflationary conditions. This study aims to examine the effect of inflation uncertainty on the impact managerial overconfidence has on overinvestment. The statistical population consists of companies listed on the Tehran Stock Exchange (TSE). One hundred five companies were selected as the sample size by systematic removal sampling reviewed in 2011-2018. Due to its dichotomous dependent variable, this study uses probit regression to test the research hypotheses. The results indicated the significant positive effect of CEO overconfidence on overinvestment. It was also noted that inflation uncertainty strengthens the positive effect of CEO overconfidence on overinvestment. Based on these results, the CEO's decisions as a decision-maker in charge of any company, especially under inflationary conditions, can play a substantial role in future corporate investment levels. Thus, with an increase in behavioral bias, it can be assumed that the company will confront grave competitive challenges under economic conditions.