Why do firms vary so much in their attitudes toward alliance formations? While prior research has predominantly focused on external pressures, the potential impact of CEO cognitive biases—specifically hubris—on alliance formation has been largely overlooked. This study introduces the concept of CEO hubris as a key factor influencing firms' propensity to form alliances. Utilizing a media-based approach to quantify levels of CEO hubris within U.S. high-tech firms, our analysis reveals that increased CEO hubris is associated with less alliance formations. Interestingly, this relationship is more pronounced in munificent environments, yet it diminishes in markets characterized by high dynamism and complexity. These findings extend our understanding of strategic alliance formation by highlighting the critical role of CEO psychological traits, particularly hubris, in shaping organizational strategy.
