Excessive Confidence Makes People Disregard the Possibility of Errors
New findings published in the journal Psychological Science confirm that overprecision – the excessive belief in the accuracy of our beliefs – is very common and that people tend to be overly confident of their knowledge, despite errors.
Albert Mannes of Wharton School of the University of Pennsylvania and Don Moore of Haas School of Business at the University of California, Berkeley, found that the more confident participants were about their estimates of an uncertain quantity, the less they adjusted their estimates in response to the feedback about their accuracy and the chance of being wrong. Put simply, people are too confident in what they know that they often underestimate what they didn’t know.
Mannes and Moore conducted three studies to test how participants make judgements based on their own beliefs. In one study, participants were asked to estimate the local high temperature on randomly selected days. Every time they get a precise estimate, they are rewarded with lottery tickets as their access to a certain prize. In some trials, they earned tickets if their estimates were close or accurate to the actual temperature. In other trials, participants won tickets for correct guesses or underestimates.
The researchers expect that the participants would adjust their estimates in the direction of the anticipated reward after receiving feedback about their accuracy. However, they didn’t adjust their estimates as much as they should have. This suggests that the participants were overly confident in the accuracy of their judgement even if there is evidence suggesting otherwise. It was only when Mannes and Moore provided exaggerated feedback (in which errors were inflated by 2.5 times) did the participants adjusted their estimates and countered their tendency of overprecision.
Consequences of Overprecision
You took a test and thought it was very easy so you didn’t start until the last minute but you ended up getting a B. You invest in a stock thinking there’s no way it will go down, but lost thousands. You get into a relationship knowing that your significant other loves you so much regardless of what you do but it resulted into a breakup. Most of us have probably experienced it before.
The researchers explained that overconfidence could have profound consequences. For example, it drive physicians come up with immediate diagnoses, push businesses to invest too quickly, and make people intolerant for dissenting views. Whilst confidence is a good trait, too much of it can do more harm than good as excessive belief on one’s own point of view may hinder him or her to consider other factors necessary to make an accurate decision.
"These studies tell us that you shouldn’t be too certain about what’s going to happen, especially when being wrong could be dangerous. You should plan to protect yourself in case you aren’t as right as you think you are." researchers said.
Source of this article:
A Behavioural Demonstration of Overconfidence in Judgment
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