Cognitive biases 002 – The overconfidence effect

by nboydgibbins

Cognitive biases 002 – The overconfidence effect

Introduction (

Perhaps one of the cognitive biases we can, or should, all relate to the most (for the reflective individual) is that of unfounded confidence. Evident too often each day, each conversation, to possibly count; this bias manifests in front of our eyes, in others and in ourselves, moment after moment, assertion after assertion. We feel certainty in our beliefs to the extent that we allow ourselves to become emotional in their defence, and even less rational still as we stand by views often unreceptive to new information or logic. How often do we make fools of ourselves as we lay down pragmatic thought to argue with those around us as if to prove our intelligence, our wisdom – what irony that practice carries. All of us have been shown the fallacy of our ways on enough occasions that it is to our sincere discredit that we still will stand by our opinions with such strength, and with such vanity, that to the keen observer far too many disputes are simply a primal clash of egos.

How frequently will we not only arrest our own efforts of analysis, of self-scrutiny, too early; but will also wager our credibility on the certainties we have that our ‘opinions’ are correct. Clearly, forgetting that inducting philosophy of wisdom; that we “know nothing except the fact of our ignorance,” is a practice we engage in interaction after interaction. The maturity and wisdom shown by those who have the strength of character to second-guess their views, particularly when those views are public, and go on to admit they are wrong, is something we should all aspire to.

Luckily these days we are able to support these philosophies empirically. Socrates had no such data to go on when he stood alone in asserting the wisdoms that have been held in the highest regard by the greatest minds that followed him, to his unending credit. On the one hand his commitment to logic was exceptional, and on the other it was hugely brave considering that, then more than now, challenging the fear-alleviating beliefs of his brothers and sisters carried the risk of death or worse.

The overconfidence effect describes the difference between the certainty that we feel, to ourselves or openly to others, and the actual accuracy of our views. This bias, like many, will manifest differently from person to person and across varying circumstances. The bias is often discussed as one of the most dangerous that is prevalent throughout humans given its likely role in financial bubbles, foolish lawsuits and wars and conflict.

There is one specific example that paints very elegantly how absurd our confidences are. Participants answering quiz questions, and giving confidence ratings, were wrong 40% of the time that they reported feeling 99% certain of their answer. Indecision is final; and probably the organisms that practiced this old cliché were left behind by those that acted on their first impressions; instantly, without contemplation. In the world of today, though, how foolish they seem.