Overconfidence Flashcards
What is overconfidence?
When subjective confidence is higher than your objective accuracy
Overconfidence can lead to risky behaviors and poor decision-making.
What does calibration refer to?
The ability to discriminate between what you know and what you don’t know
Calibration is more important than simply knowing a lot.
What are some consequences of overconfidence?
Can get you killed, can lead to bad decisions
For example, tired driving can be a result of overconfidence.
How can confident teachers affect students?
Confident teachers can make students feel more confident in their abilities
A study by Carpenter et al. (2013) showed that students felt more confident but scored the same regardless of teacher confidence.
What is ‘reference group neglect’?
The tendency of entrepreneurs to overlook competitors’ skills
This concept was introduced by Camerer and Lovello in 2000.
What is egocentrism in the context of overconfidence?
The phenomenon where people feel more overconfident about their abilities when they perceive some control
Windschitl (2003) discussed this concept.
What is required for management decision-making?
Self-confidence to take risky decisions
Confidence leads to goal persistence and the willingness to endure challenges.
What is overplacement?
Believing you are better than others or better than average
This occurs more often on simple tasks than on harder ones.
What is overprecision?
Excessive certainty regarding the accuracy of one’s beliefs
This can lead people to give overly confident estimates of their knowledge.
What is the Dunning-Kruger effect?
A cognitive bias leading unskilled individuals to feel much more confident about their skills
Proposed by Dunning and Kruger in 1999, it highlights the tendency for less experienced people to not know what they don’t know.
What are the three tendencies of incompetent individuals according to the Dunning-Kruger effect?
- Overestimate their level of competency
- Fail to recognize genuine competency in others
- Fail to recognize the extremity of their inadequacy
What two types of explanations can cause biases in decision-making?
- Motivational (hot) explanations
- Cognitive (cold) explanations
Both types can occur simultaneously.
What is the definition of confidence?
Trust or faith that a person or thing is capable
Confidence can be differentiated from self-confidence, which is having faith in oneself.
Fill in the blank: Overconfidence is _______.
unmerited confidence
It involves believing something or someone is capable when they are not.
What happens when a person is 100% certain according to cognitive bias?
They expect no errors, but errors can happen more than expected
This highlights the pitfalls of overconfidence.
