Meaning
A cognitive bias where an individual overestimates their own contribution to a joint project or venture relative to the contributions of others. This tendency is a frequent source of friction during post-founding equity splits and separation negotiations. Recognizing egocentric attribution helps neutral mediators guide parties toward realistic assessments of their actual output.
Contribution Bias
Individuals naturally recall their own efforts more vividly than the work of their peers. In equity discussions, the contribution bias of the egocentric attribution leads to inflated claims of value. This discrepancy can be resolved by relying on objective performance metrics.
Conflict Resolution
Mediators must use documented facts to counter exaggerated claims of involvement. By presenting commit logs and signed contracts, advisors can guide the discussion away from subjective feelings. This process shifts the focus to verifiable achievements.
It also helps the parties find common ground by demonstrating that both contributions were necessary for the company to reach its current stage.
Equity Allocation
Distributing shares based on actual rather than perceived contributions protects the company from future resentment. When the equity allocation of the egocentric attribution is corrected, it aligns ownership with the real drivers of business growth. This alignment supports a stable corporate governance structure.
