Jiang ChengHung-Gay FungTzu-Ting LinMin-Ming Wen2024-10-222024-10-222024-070924865Xhttps://www.scopus.com/record/display.uri?eid=2-s2.0-85192810560&origin=resultslisthttps://scholars.lib.ntu.edu.tw/handle/123456789/722310In this study, we examine the effects of the degree of CEO optimism on their risk-taking behaviors and on firm value and show that CEOs with low overconfidence tend to take on more risk (in terms of tail risk) and have a lower Tobin’s Q than companies whose CEOs have moderate or high overconfidence. To do so, we use a sample of life insurance companies divided into three subsamples, based on the degree of CEO overconfidence (OC): low OC, moderate OC, and high OC. Our additional analyses indicate that, before the 2008 global financial crisis, all three OC subsamples have a positive effect on Tobin’s Q from the net credit default swap (CDS) sell positions. But, after the financial crisis, all the three OC groups use CDS to reduce firms’ risk-taking behavior, rather than to increase firm value.enfalseCDS tradingFirm performanceG22G32G34Life insurance industryOptimistic/overconfident CEOsRisk-taking behaviors[SDGs]SDG10journal article10.1007/s11156-024-01254-82-s2.0-85192810560