By using the data of public listed bank bidders in the U.S. from 1998 to 2014, this paper examines the relationship between stock options incentives, agency cost, CEO overconfidence, and acquisition investment decisions, with agency cost and CEO overconfidence as the mediating and moderating variables respectively. We find that the correlation between CEO stock option based compensation and acquisition investment decisions is significantly positive; agency cost has a mediating effect between the relationship of stock options incentives and acquisition investment decisions; the moderating effect of CEO overconfidence is significant; while stock options incentives cannot induce overconfident CEOs to make acquisitions, non overconfident CEOs with stock options incentives are more likely to conduct acquisition investments. The moderating effect of CEO overconfidence can also function via agency cost.