Managerial overconfidence in capital structure decisions and its link to aggregate demand: An agent-based model perspective

Marcin Rzeszutek; Antoine Godin; Adam Szyszka; Stanislas Augier

doi:10.1371/journal.pone.0255537

Peer Review History

Original SubmissionMay 28, 2021
1 Jul 2021 Decision Letter - J E. Trinidad Segovia, Editor PONE-D-21-17371 Managerial overconfidence in capital structure decisions and its link to aggregate demand: an agent-based model perspective PLOS ONE Dear Dr. Rzeszutek, Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. The manuscript is very near of being suitable of publication. One of the reviewers have some minor concerns that need to be addressed in a revised version. Please submit your revised manuscript by Aug 15 2021 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file. Please include the following items when submitting your revised manuscript: A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'. A marked-up copy of your manuscript that highlights changes made to the original version. You should upload this as a separate file labeled 'Revised Manuscript with Track Changes'. An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'. If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter. If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: http://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols. Additionally, PLOS ONE offers an option for publishing peer-reviewed Lab Protocol articles, which describe protocols hosted on protocols.io. Read more information on sharing protocols at https://plos.org/protocols?utm_medium=editorial-email&utm_source=authorletters&utm_campaign=protocols. We look forward to receiving your revised manuscript. Kind regards, J E. Trinidad Segovia Academic Editor PLOS ONE Journal Requirements: When submitting your revision, we need you to address these additional requirements. 1. Please ensure that your manuscript meets PLOS ONE's style requirements, including those for file naming. The PLOS ONE style templates can be found at https://journals.plos.org/plosone/s/file?id=wjVg/PLOSOne_formatting_sample_main_body.pdf and https://journals.plos.org/plosone/s/file?id=ba62/PLOSOne_formatting_sample_title_authors_affiliations.pdf 2. Thank you for stating the following financial disclosure: 'The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.' At this time, please address the following queries: Please clarify the sources of funding (financial or material support) for your study. List the grants or organizations that supported your study, including funding received from your institution. State what role the funders took in the study. If the funders had no role in your study, please state: “The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.” If any authors received a salary from any of your funders, please state which authors and which funders. If you did not receive any funding for this study, please state: “The authors received no specific funding for this work.” Please include your amended statements within your cover letter; we will change the online submission form on your behalf. Please review your reference list to ensure that it is complete and correct. If you have cited papers that have been retracted, please include the rationale for doing so in the manuscript text, or remove these references and replace them with relevant current references. Any changes to the reference list should be mentioned in the rebuttal letter that accompanies your revised manuscript. If you need to cite a retracted article, indicate the article’s retracted status in the References list and also include a citation and full reference for the retraction notice. Additional Editor Comments (if provided): [Note: HTML markup is below. Please do not edit.] Reviewers' comments: Reviewer's Responses to Questions Comments to the Author 1. Is the manuscript technically sound, and do the data support the conclusions? The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented. Reviewer #1: Yes Reviewer #2: Yes ******** 2. Has the statistical analysis been performed appropriately and rigorously? Reviewer #1: Yes Reviewer #2: Yes ****** 3. Have the authors made all data underlying the findings in their manuscript fully available? The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified. Reviewer #1: Yes Reviewer #2: Yes ****** 4. Is the manuscript presented in an intelligible fashion and written in standard English? PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here. Reviewer #1: Yes Reviewer #2: Yes ****** 5. Review Comments to the Author Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters) Reviewer #1: The article addresses the impact of managerial overconfidence at the micro and macro levels of the economy as a whole. The study combines agent-based macroeconomics and behavioural finance. It is interesting and covers a wide range of aspects. Below, I include some comments that can help the Authors to improve their article. 1. On page 2, there is the objective ‘This study aims to connect two strands of the psychology and economics literature, i.e., behavioural finance and agent-based macroeconomics, to assess the impact of managerial overconfidence at the micro and macro levels of the economy as a whole.’ But later, the aim is stated this way: ‘The aim here is to investigate the two-way association between managerial practices relating to the target capital structure of a company and selected macroeconomic indicators at the aggregate level.’ In my opinion, it would be more beneficial to choose precisely one sentence which is called either objective or aim and always refer to this one sentence (which of course, can be explained by some further sentences in the paragraph). 2. There are some inconsistencies when it comes to the mathematical approach. Some variables or indices are weakly explained or not explained at all, and the reader must guess them from the text. For example, is ‘i’ is for the number of firms? It is not explained. And ki in the third equation on page 10 is explained much later on page 12. The next unexplained variable is λ , if it was at least added in the text next to the description, it would be more comprehensible. In equation (1), the variable on the left side is ydei. But, on the right side, there is ydi,-1. If the second subscript is added, then the main variable on the left side of the equation should be ydei,t. Moreover, if it is about time, and we refer to a given time, so I would recommend to use ‘t-1’ instead of ‘-1’. In my opinion, it would be beneficial to consult all the formulas with a mathematician. 3. The way of referring to the equations is a bit odd, and it should be corrected. In this statement: ‘C-Firms’ expected demand (, 1) follows a double…’, it seems like the Authors were referring to a vector function of the expected demand. Generally, in mathematics, when referring to a given equation, only the number of the equation is shown in parentheses. So, it should be ‘C-Firms’ expected demand (1) follows a double…’, and later ‘C-firms have a target inventories to expected demand ratio (2), following…’ and the same for each reference to each equation. 4. There is some unnecessary numbering at the beginning of chapter 3. 5. On page 4, the last sentence ‘C-firms expected sales are bounded by their production decision plus available inventories (3)’. It should be ‘4’ instead of ‘3’, or to be consistent with the other references ‘(e, 4)’. 6. In the article, there are many equations, but not all of them are directly referred to in the text. In my opinion, it would be more consistent, and it would help the reader, if the reference to each equation was added (see for instance the equations 33, 34, 45) 7. Subchapter 1.1. There is only one subchapter at this level. So, I would recommend choosing one of these two options: a) Move it to chapter 1 (without a separate 1.1 subchapter) b) Move the first part of this subchapter considering the current study to chapter 2, and move the information about the remainder of the paper to chapter no. 1. I leave the decision to the Authors. 8. After subchapter 3.1. the next is 8.1 – please correct the numbering. 9. Please think about what this study is about. Is it optimism that affects beliefs concerning the probability of a payoff, or is it overconfidence that affects beliefs when individuals assess their own performance? Referring to formulas on page 12, I would say that it is overconfidence. Overconfidence seemed to be a focal term in this study, and it is exposed in the title but not in the text. In subchapter 8.1, the Authors refer to ‘optimistic’ firms. I would recommend referring to ‘overconfidence’ instead to strengthen the importance of this term in the study (from page 8 to page 34, ‘overconfidence’ is not mentioned). Similarly, it should be emphasised in subchapter 10.2 (pp. 26-27) and in the Conclusions section (where it is mentioned only once). 10. On page 10, the Authors refer to Steindl (1952) and Lavoie (1992). What about the latter formulas? Are they the Authors own work? Aren’t they based on any other studies? There are no other references till page 19. If they are the Authors own work, it should be emphasised in the text. 11. On page 20, in descriptions of equations (65-67), there is a phonetic name ‘rho’, but in the equation, there is a letter ρ, e.g., ρ_i^e=ρ ̅_i. It would be beneficial to use just the letter ρ in order not to confuse the readers. Moreover, it would be consistent with the other descriptions. 12. p. 22, unnecessary square bracket: ‘…have enough own funds (82]) to satisfy…’ 13. p. 25: ‘The values for all parameters are in Table 3, in Appendix.’ Shouldn’t it be Table 6? However, this table is quite long. So, it could be moved to an Appendix. 14. In the title of figure 1, it would be beneficial to add the information that it refers to the structure of GDP. 15. Please check the language before resubmitting, e.g., p. 25 ‘Figure 2 display the cyclical components of GDP….’ 16. The formatting needs to be improved following the standards for PLOS ONE articles: https://journals.plos.org/plosone/s/submission-guidelines Reviewer #2: The authors present an agent-based model of macroeconomics seeking to investigate the impact of managerial overconfidence on the micro and macro levels of the economy. The proposed agent-based model links micro and macro parts of the analysis, helping to combine the behavioral aspect at the micro-level with the aggregated results at the macro level. The proposed model is calibrated for the specific macro indicators of Poland and uses recent findings of previous studies. The main idea is beautiful as it modifies the neoclassical approach by introducing the agent heterogeneity relating it to the target capital structure. Though there is a feeling that authors investigate properties of artificially constructed dynamical system witch has fragile relation to the real economy under consideration, the qualitative interpretation of the model behavior and numerical results support the made conclusions. Readers of this manuscript have to look at the many cited resources to follow the authors' thoughts. Nevertheless, the model description looks very detailed and accurate. We would propose this manuscript for publication in Plos One. PS: There are left typos in the manuscript, e.g., the same sentence is repeated twice in pages 27-28. ****** 6. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files. If you choose “no”, your identity will remain anonymous but your review may still be made public. Do you want your identity to be public for this peer review?** For information about this choice, including consent withdrawal, please see our Privacy Policy. Reviewer #1: No Reviewer #2: No [NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.] While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool, https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. Registration is free. Then, login and navigate to the UPLOAD tab, where you will find detailed instructions on how to use the tool. If you encounter any issues or have any questions when using PACE, please email PLOS at figures@plos.org. Please note that Supporting Information files do not need this step. https://doi.org/10.1371/journal.pone.0255537.r001
Revision 1
5 Jul 2021 Author Response Dear Editor, Dear Reviewers, thank you very much for your suggestions and remarks concerning our article titled “Managerial overconfidence in capital structure decisions and its link to aggregate demand: an agent-based model perspective”, which we would like to publish in PLOS One. Below we cite the every remark and comment and provide our answers to them in parentheses. All the changes in the text are marked with the red font. Editor statements When submitting your revision, we need you to address these additional requirements. 1. Please ensure that your manuscript meets PLOS ONE's style requirements, including those for file naming. The PLOS ONE style templates can be found at https://journals.plos.org/plosone/s/file?id=wjVg/PLOSOne_formatting_sample_main_body.pdf and https://journals.plos.org/plosone/s/file?id=ba62/PLOSOne_formatting_sample_title_authors_affiliations.pdf [Yes, our manuscript meets PLOS ONE's style requirements mentioned above.] 2. Thank you for stating the following financial disclosure: 'The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.At this time, please address the following queries: a. Please clarify the sources of funding (financial or material support) for your study. List the grants or organizations that supported your study, including funding received from your institution. b. State what role the funders took in the study. If the funders had no role in your study, please state: “The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.” c. If any authors received a salary from any of your funders, please state which authors and which funders. d. If you did not receive any funding for this study, please state: “The authors received no specific funding for this work.”Please include your amended statements within your cover letter; we will change the online submission form on your behalf. [Thank you for this clarification. We included all the details regarding the funding as is mentioned above.] Please review your reference list to ensure that it is complete and correct. If you have cited papers that have been retracted, please include the rationale for doing so in the manuscript text, or remove these references and replace them with relevant current references. Any changes to the reference list should be mentioned in the rebuttal letter that accompanies your revised manuscript. If you need to cite a retracted article, indicate the article’s retracted status in the References list and also include a citation and full reference for the retraction notice. [Also the reference list was again reviewed to check and verify its correctness.] Reviewers' comments: Reviewer's Responses to Questions Comments to the Author 1. Is the manuscript technically sound, and do the data support the conclusions? The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented. Reviewer #1: Yes Reviewer #2: Yes ________________________________________ 2. Has the statistical analysis been performed appropriately and rigorously? Reviewer #1: Yes Reviewer #2: Yes ________________________________________ 3. Have the authors made all data underlying the findings in their manuscript fully available? The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified. Reviewer #1: Yes Reviewer #2: Yes ________________________________________ 4. Is the manuscript presented in an intelligible fashion and written in standard English? PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here. Reviewer #1: Yes Reviewer #2: Yes ________________________________________ [Overall, thank you both reviewers for positive, quantitative feedback on our manuscript.] Reviewer #1: The article addresses the impact of managerial overconfidence at the micro and macro levels of the economy as a whole. The study combines agent-based macroeconomics and behavioural finance. It is interesting and covers a wide range of aspects. Below, I include some comments that can help the Authors to improve their article. 1. On page 2, there is the objective ‘This study aims to connect two strands of the psychology and economics literature, i.e., behavioural finance and agent-based macroeconomics, to assess the impact of managerial overconfidence at the micro and macro levels of the economy as a whole.’ But later, the aim is stated this way: ‘The aim here is to investigate the two-way association between managerial practices relating to the target capital structure of a company and selected macroeconomic indicators at the aggregate level.’ In my opinion, it would be more beneficial to choose precisely one sentence which is called either objective or aim and always refer to this one sentence (which of course, can be explained by some further sentences in the paragraph). [Thank you very much for this remark. It is true that this one sentence is more communicative, and thus, we changed it to one sentence in accordance to Reviewer’s 1 suggestion.] 2. There are some inconsistencies when it comes to the mathematical approach. Some variables or indices are weakly explained or not explained at all, and the reader must guess them from the text. For example, is ‘i’ is for the number of firms? It is not explained. And ki in the third equation on page 10 is explained much later on page 12. The next unexplained variable is λ , if it was at least added in the text next to the description, it would be more comprehensible. In equation (1), the variable on the left side is ydei. But, on the right side, there is ydi,-1. If the second subscript is added, then the main variable on the left side of the equation should be ydei,t. Moreover, if it is about time, and we refer to a given time, so I would recommend to use ‘t-1’ instead of ‘-1’. In my opinion, it would be beneficial to consult all the formulas with a mathematician. [Thank you very much for this remark. It is true that we missed some clarifications in describing the equations in a consistent way. We made sure to explain every variable appearing in the equations while identifying parameters. In this way, we hope that the reading of the text is now more fluid and clearer.] 3. The way of referring to the equations is a bit odd, and it should be corrected. In this statement: ‘C-Firms’ expected demand (, 1) follows a double…’, it seems like the Authors were referring to a vector function of the expected demand. Generally, in mathematics, when referring to a given equation, only the number of the equation is shown in parentheses. So, it should be ‘C-Firms’ expected demand (1) follows a double…’, and later ‘C-firms have a target inventories to expected demand ratio (2), following…’ and the same for each reference to each equation. [Thank you again for paying our attention to our inconsistency. In the revised version of manuscript, we now propose both the equation number and the name of the variable.] 4. There is some unnecessary numbering at the beginning of chapter 3. [Thank you for this remark. We corrected it.] 5. On page 4, the last sentence ‘C-firms expected sales are bounded by their production decision plus available inventories (3)’. It should be ‘4’ instead of ‘3’, or to be consistent with the other references ‘(e, 4)’. [Again – thank you very much for catching all our formal mistakes. We apology for them. Obviously, we corrected it.] 6. In the article, there are many equations, but not all of them are directly referred to in the text. In my opinion, it would be more consistent, and it would help the reader, if the reference to each equation was added (see for instance the equations 33, 34, 45). [Thank for this remark. Yes, we also think that it is a good idea and we did update the text accordingly] 7. Subchapter 1.1. There is only one subchapter at this level. So, I would recommend choosing one of these two options: a) Move it to chapter 1 (without a separate 1.1 subchapter) b) Move the first part of this subchapter considering the current study to chapter 2, and move the information about the remainder of the paper to chapter no. 1. I leave the decision to the Authors. [The best idea for us was a. We moved it to chapter 1 without a separate 1.1 subchapter.] 8. After subchapter 3.1. the next is 8.1 – please correct the numbering. [We corrected it, Thank you.] 9. Please think about what this study is about. Is it optimism that affects beliefs concerning the probability of a payoff, or is it overconfidence that affects beliefs when individuals assess their own performance? Referring to formulas on page 12, I would say that it is overconfidence. Overconfidence seemed to be a focal term in this study, and it is exposed in the title but not in the text. In subchapter 8.1, the Authors refer to ‘optimistic’ firms. I would recommend referring to ‘overconfidence’ instead to strengthen the importance of this term in the study (from page 8 to page 34, ‘overconfidence’ is not mentioned). Similarly, it should be emphasised in subchapter 10.2 (pp. 26-27) and in the Conclusions section (where it is mentioned only once). [Thank you very much for this fundamental remark. Yes, the core psychological bias we assessed is overconfidence. We used “optimism” word to enhance the flow of the text, as synonym. But we now stick to “overconfidence” throughout 10. On page 10, the Authors refer to Steindl (1952) and Lavoie (1992). What about the latter formulas? Are they the Authors own work? Aren’t they based on any other studies? There are no other references till page 19. If they are the Authors own work, it should be emphasised in the text. [Thank you for this remark, we were indeed a bit light on the references. We made sure to highlight where we were inspired by specific articles or where we used exact formulations from the literature.] 11. On page 20, in descriptions of equations (65-67), there is a phonetic name ‘rho’, but in the equation, there is a letter ρ, e.g., ρ_i^e=ρ ̅_i. It would be beneficial to use just the letter ρ in order not to confuse the readers. Moreover, it would be consistent with the other descriptions. 12. p. 22, unnecessary square bracket: ‘…have enough own funds (82]) to satisfy…’ 13. p. 25: ‘The values for all parameters are in Table 3, in Appendix.’ Shouldn’t it be Table 6? However, this table is quite long. So, it could be moved to an Appendix. [Thank you for these remarks, we have indeed corrected all these typos] 14. In the title of figure 1, it would be beneficial to add the information that it refers to the structure of GDP. [Very good suggestion. We did accordingly.] 15. Please check the language before resubmitting, e.g., p. 25 ‘Figure 2 display the cyclical components of GDP….’ [We sent our submission tot the professional English editing service. However, we now again checked the text to look for some inconsistencies, like above.] 16. The formatting needs to be improved following the standards for PLOS ONE articles: https://journals.plos.org/plosone/s/submission-guidelines [Thank you for this remark. We adhered to PLOS one formatting.] Reviewer #2: The authors present an agent-based model of macroeconomics seeking to investigate the impact of managerial overconfidence on the micro and macro levels of the economy. The proposed agent-based model links micro and macro parts of the analysis, helping to combine the behavioral aspect at the micro-level with the aggregated results at the macro level. The proposed model is calibrated for the specific macro indicators of Poland and uses recent findings of previous studies. The main idea is beautiful as it modifies the neoclassical approach by introducing the agent heterogeneity relating it to the target capital structure. Though there is a feeling that authors investigate properties of artificially constructed dynamical system witch has fragile relation to the real economy under consideration, the qualitative interpretation of the model behavior and numerical results support the made conclusions. Readers of this manuscript have to look at the many cited resources to follow the authors' thoughts. Nevertheless, the model description looks very detailed and accurate. We would propose this manuscript for publication in Plos One. PS: There are left typos in the manuscript, e.g., the same sentence is repeated twice in pages 27-28. [Thank you very much for this very kind words on our manuscript. We highly appreciate them. Finally, we corrected the aforementioned typo.] To sum up, we would like to thank again the Editor and Reviewers for suggestions and remarks concerning our manuscript. We found these comments very useful as they provided us with help and guidance on how to improve quality of the manuscript. We really appreciated the chance you gave us to revise and resubmit our manuscript to PLOS One. https://doi.org/10.1371/journal.pone.0255537.r002
13 Jul 2021 Decision Letter - J E. Trinidad Segovia, Editor PONE-D-21-17371R1 Managerial overconfidence in capital structure decisions and its link to aggregate demand: an agent-based model perspective PLOS ONE Dear Dr. Rzeszutek, Thank you for submitting your manuscript to PLOS ONE. After careful consideration, I feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. Most of the major comments have been addressed but unfortunately there are some minor questions that need to be solved before publication. I suggest to the authors to attend this questions a re-submit the revised version as soon as possible. Please submit your revised manuscript by Aug 27 2021 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file. Please include the following items when submitting your revised manuscript: A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'. A marked-up copy of your manuscript that highlights changes made to the original version. You should upload this as a separate file labeled 'Revised Manuscript with Track Changes'. An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'. If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter. If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: http://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols. Additionally, PLOS ONE offers an option for publishing peer-reviewed Lab Protocol articles, which describe protocols hosted on protocols.io. Read more information on sharing protocols at https://plos.org/protocols?utm_medium=editorial-email&utm_source=authorletters&utm_campaign=protocols. We look forward to receiving your revised manuscript. Kind regards, J E. Trinidad Segovia Academic Editor PLOS ONE Journal Requirements: Please review your reference list to ensure that it is complete and correct. If you have cited papers that have been retracted, please include the rationale for doing so in the manuscript text, or remove these references and replace them with relevant current references. Any changes to the reference list should be mentioned in the rebuttal letter that accompanies your revised manuscript. If you need to cite a retracted article, indicate the article’s retracted status in the References list and also include a citation and full reference for the retraction notice. [Note: HTML markup is below. Please do not edit.] Reviewers' comments: Reviewer's Responses to Questions Comments to the Author 1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation. Reviewer #1: (No Response) ******** 2. Is the manuscript technically sound, and do the data support the conclusions? The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented. Reviewer #1: Yes ****** 3. Has the statistical analysis been performed appropriately and rigorously? Reviewer #1: Yes ****** 4. Have the authors made all data underlying the findings in their manuscript fully available? The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified. Reviewer #1: Yes ****** 5. Is the manuscript presented in an intelligible fashion and written in standard English? PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here. Reviewer #1: Yes ****** 6. Review Comments to the Author Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters) Reviewer #1: Thank you for your efforts to correct the article. I noticed that the issues I raised were generally well addressed. Here are just the last comments and remarks: 1. On p. 8, the Authors wrote ‘firm’s overconfidence’. Wouldn’t it be more precise to write ‘managerial overconfidence’? I leave this decision to the Authors. 2. Subchapter 3.1. starts with 5 points. In my opinion, this numbering confuses the reader, especially if there are also numbers of equations that are different from numbering. I think it could be deleted without losing the clarity of the text. I leave this decision to the Authors. 3. I can see that in my previous review, some variables are missing. So, I will write once again what I meant to say. The way of referring to the equations is a bit odd, and in my opinion, should be corrected. In this statement: ‘C-Firms’ expected demand (ydei, 1) follows a double….’ It seems like the Authors were referring to a vector function of the expected demand. Generally, in mathematics, when referring to a given equation, only the number of the equation is shown in parentheses (the variable is not). So, I recommend referring to formulas this way: ‘C-Firms’ expected demand ydei (1) follows a double…’. In my opinion this change would be beneficial. However, I leave this decision to the Authors. 4. On p. 12, the expression in brackets was added. It explains the formulas sufficiently. However, there are some hyphens that may confuse the reader. ‘(composed of wages, interests payments on debt -, ⋅ ,−1- and interests receipts on deposits -, ⋅ ,−1-)’. The Authors could discuss it, and consider changing the text in parentheses. 5. Appendix starts with: ‘Appendix [INSERT TABLE 3 ABOUT HERE] Table 1: Balance sheet...’ Please correct it. ****** 7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files. If you choose “no”, your identity will remain anonymous but your review may still be made public. Do you want your identity to be public for this peer review?** For information about this choice, including consent withdrawal, please see our Privacy Policy. Reviewer #1: No [NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.] While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool, https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. Registration is free. Then, login and navigate to the UPLOAD tab, where you will find detailed instructions on how to use the tool. If you encounter any issues or have any questions when using PACE, please email PLOS at figures@plos.org. Please note that Supporting Information files do not need this step. https://doi.org/10.1371/journal.pone.0255537.r003
Revision 2
13 Jul 2021 Author Response Dear Editor, Dear Reviewers, thank you very much for another suggestions and remarks concerning our article titled “Managerial overconfidence in capital structure decisions and its link to aggregate demand: an agent-based model perspective”, which we would like to publish in PLOS One. Below we cite every remark and comment and provide our answers to them in parentheses. All the changes in the text are marked with the red font. Reviewer Thank you for your efforts to correct the article. I noticed that the issues I raised were generally well addressed. Here are just the last comments and remarks: [Thank you very much for kind words on our revision.] 1. On p. 8, the Authors wrote ‘firm’s overconfidence’. Wouldn’t it be more precise to write ‘managerial overconfidence’? I leave this decision to the Authors. [Thank you very much for this remark - we wrote ‘managerial overconfidence’.] 2. Subchapter 3.1. starts with 5 points. In my opinion, this numbering confuses the reader, especially if there are also numbers of equations that are different from numbering. I think it could be deleted without losing the clarity of the text. I leave this decision to the Authors. [Thank you very much for another interesting suggestion -we did as the reviewer suggested.] 3. I can see that in my previous review, some variables are missing. So, I will write once again what I meant to say. The way of referring to the equations is a bit odd, and in my opinion, should be corrected. In this statement: ‘C-Firms’ expected demand (ydei, 1) follows a double….’ It seems like the Authors were referring to a vector function of the expected demand. Generally, in mathematics, when referring to a given equation, only the number of the equation is shown in parentheses (the variable is not). So, I recommend referring to formulas this way: ‘C-Firms’ expected demand ydei (1) follows a double…’. In my opinion this change would be beneficial. However, I leave this decision to the Authors. [Thank you very much for this remark. However, according to the mathematician we work with, the way of referring to equation was done in purpose. This reflects the ABM simulation style and it was generally following the style adopted in this field. But thank you for your suggestion again.] 4. On p. 12, the expression in brackets was added. It explains the formulas sufficiently. However, there are some hyphens that may confuse the reader. ‘(composed of wages, interests payments on debt -𝑖𝑙,𝑖 ⋅ 𝑙𝑖,−1- and interests receipts on deposits -, 𝑖𝑑 ⋅ 𝑑𝑖,−1-)’. The Authors could discuss it, and consider changing the text in parentheses. [Again, we would like to underscore that it was done in purpose - according to the mathematician we work with, the way of referring to equation was done in purpose. This reflects the ABM simulation style and it was generally following the style adopted in this field. But thank you for your suggestion again.] 5. Appendix starts with: ‘Appendix [INSERT TABLE 3 ABOUT HERE] Table 1: Balance sheet...’ Please correct it. [Thank you -we corrected it.] To sum up, we would like to thank again the Editor and Reviewers for suggestions and remarks concerning our manuscript. We found these comments very useful as they provided us with help and guidance on how to improve quality of the manuscript. We really appreciated the chance you gave us to revise and resubmit our manuscript to PLOS One. https://doi.org/10.1371/journal.pone.0255537.r004
19 Jul 2021 Decision Letter - J E. Trinidad Segovia, Editor Managerial overconfidence in capital structure decisions and its link to aggregate demand: an agent-based model perspective PONE-D-21-17371R2 Dear Dr. Rzeszutek, We’re pleased to inform you that your manuscript has been judged scientifically suitable for publication and will be formally accepted for publication once it meets all outstanding technical requirements. Within one week, you’ll receive an e-mail detailing the required amendments. When these have been addressed, you’ll receive a formal acceptance letter and your manuscript will be scheduled for publication. An invoice for payment will follow shortly after the formal acceptance. To ensure an efficient process, please log into Editorial Manager at http://www.editorialmanager.com/pone/, click the 'Update My Information' link at the top of the page, and double check that your user information is up-to-date. If you have any billing related questions, please contact our Author Billing department directly at authorbilling@plos.org. If your institution or institutions have a press office, please notify them about your upcoming paper to help maximize its impact. If they’ll be preparing press materials, please inform our press team as soon as possible -- no later than 48 hours after receiving the formal acceptance. Your manuscript will remain under strict press embargo until 2 pm Eastern Time on the date of publication. For more information, please contact onepress@plos.org. Kind regards, J E. Trinidad Segovia Section Editor PLOS ONE Additional Editor Comments (optional): Reviewers' comments: Reviewer's Responses to Questions Comments to the Author 1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation. Reviewer #1: All comments have been addressed ******** 2. Is the manuscript technically sound, and do the data support the conclusions? The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented. Reviewer #1: Yes ****** 3. Has the statistical analysis been performed appropriately and rigorously? Reviewer #1: Yes ****** 4. Have the authors made all data underlying the findings in their manuscript fully available? The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified. Reviewer #1: Yes ****** 5. Is the manuscript presented in an intelligible fashion and written in standard English? PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here. Reviewer #1: Yes ****** 6. Review Comments to the Author Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters) Reviewer #1: All my comments were adequately addressed. In my opinion, the article can be accepted for publication. ****** 7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files. If you choose “no”, your identity will remain anonymous but your review may still be made public. Do you want your identity to be public for this peer review?** For information about this choice, including consent withdrawal, please see our Privacy Policy. Reviewer #1: No https://doi.org/10.1371/journal.pone.0255537.r005
Formally Accepted
28 Jul 2021 Acceptance Letter - J E. Trinidad Segovia, Editor PONE-D-21-17371R2 Managerial overconfidence in capital structure decisions and its link to aggregate demand: an agent-based model perspective Dear Dr. Rzeszutek: I'm pleased to inform you that your manuscript has been deemed suitable for publication in PLOS ONE. Congratulations! Your manuscript is now with our production department. If your institution or institutions have a press office, please let them know about your upcoming paper now to help maximize its impact. If they'll be preparing press materials, please inform our press team within the next 48 hours. Your manuscript will remain under strict press embargo until 2 pm Eastern Time on the date of publication. For more information please contact onepress@plos.org. If we can help with anything else, please email us at plosone@plos.org. Thank you for submitting your work to PLOS ONE and supporting open access. Kind regards, PLOS ONE Editorial Office Staff on behalf of Dr. J E. Trinidad Segovia Section Editor PLOS ONE https://doi.org/10.1371/journal.pone.0255537.r006

Open letter on the publication of peer review reports

PLOS recognizes the benefits of transparency in the peer review process. Therefore, we enable the publication of all of the content of peer review and author responses alongside final, published articles. Reviewers remain anonymous, unless they choose to reveal their names.

We encourage other journals to join us in this initiative. We hope that our action inspires the community, including researchers, research funders, and research institutions, to recognize the benefits of published peer review reports for all parts of the research system.

Learn more at ASAPbio .