Overconfidence: We Aren’t as Good as We Think

​Human are fallible creatures. We make mistakes and more often than not we aren’t able to realize it when we make one. One of the sources of such times is the bias from overconfidence. When we experience overconfidence, we overestimate our knowledge or our skills when in reality those confidences are baseless.

Don A. Moore, a psychologist from Psychology Today, thinks that this bias is the mother of biases because of two reasons. Firstly, it is so widespread and common that 93% of American drivers claim to be better than the median, which is virtually impossible [1]. The second reason is that it is the root of many other biases. If we didn’t realize that we are vulnerable to psychological biases, this will make us prone to many other biases. Disproportionate confidence in ourselves, either it is in terms of knowledge, skills, or judgement, will make us ignore that vulnerability. Hence, it triggers and amplifies other biases.

There is an interesting book written by Peter Bevelin entitled “Seeking Wisdom”. This book mentions about overconfidence:

“Most of us believe we are better performers, more honest and intelligent, have a better future, have a happier marriage, are less vulnerable than the average person, etc. But we can’t all be better than average.”

Knowing our tendency to be overconfident, what can we do to prevent this bias to ruin our lives? Charlie Munger says that we should train and habituate our thinking into using simple high school probability more often. Moreover, Peter Bevelin reminds us that in every situation we should focus on what can go wrong and the consequences. Finally, to always be skeptical is also great to prevent ourselves to be trapped by the cloud of overconfidence and over-optimism.

[1] Ola Svenson, ‘Are We Less Risky and More Skillful than Our Fellow Drivers?’, Acta Psychologica, 47 (1981), 143–51.