Based　on　the　past　research　on　overconfidence,　we　present　a　model　of　an　overconfident　retailer　who　has　biased　belief　on　variance　of　demand.　We　investigate　the　deviation　on　orders　and　profits　between　him　and　the　rational　one,　and　then　prove　that　what　the　relationship　between　profits　and　overconfidence　level　is.　Because　the　overconfident　retailer＇s　profits　are　always　less　than　the　rational　one＇s,　we　discuss　how　supplier　could　take　contractual　mechanisms　to　achieve　the　maximize　profits　of　supply　chain,　when　confronted　with　an　overconfident　retailer.　©　(2014)　Trans　Tech　Publications,　Switzerland.