Self Deception and the Overconfidence Effect
In a recent interview in The Guardian, Daniel Kahnemann, Nobel-Prize winner and author of the best-selling Thinking Fast and Slow, said ‘What would I eliminate if I had a magic wand? Overconfidence.
’Kahnemann is speaking of the overconfidence effect; the cognitive bias that leads us to have a degree of confidence in our judgements that exceeds objective measures of our accuracy. The consequences of the overconfidence effect can be seen on a global scale (think the invasion of Iraq, the GFC), at an organisational level (what percentage of your organisation’s major projects are completed on time and on budget?) and on the individual front (think you’re a better driver than most of your fellow road-users? So does almost everyone else).
However, even if your judgements are inaccurate, there’s no doubt that overconfidence can, in some circumstances, be a desirable trait. One of the ways in which your friends, colleagues, and future employers estimate your value is by observing your apparent estimation of your own value … and if it appears that you rate your abilities, skills and knowledge highly, others may well follow suit.
Conversely, when it comes to decision-making, the price of overconfidence can be high. Research has demonstrated that the higher our overconfidence, the more likely we are to take on – and fail at – difficult tasks. The overconfidence effect can lead us to ignore wise counsel, overlook significant risks and surround ourselves with people who confirm our (inaccurate) view of ourselves.
So how to reconcile the benefits and drawbacks of overconfidence? Well, the trick may be to develop skills in appearing confident (more on that in a future post!), while doing all that you can to accurately assess your judgements and knowledge.
And when next you’re making a significant decision, you can mitigate your overconfidence by:
- Asking yourself ‘how would others rate my judgement on this matter?’
- Actively seeking views that contradict your position: and listening to them!
- Conducting a pre-mortem to identify all the possible reasons this decision could lead to failure. Then work backwards and plan to mitigate any of the significant risks.
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