Overconfidence Bias: What It Is and How to Overcome It - Deepstash

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Overconfidence Bias: What It Is and How to Overcome It

taylorpearson.me

Overconfidence bias

Most people think they know more than they really do.

Researchers showed that people believe they understand familiar manufactured objects much better than they really do. For instance, if you think you understand how a can opener works, try to draw a diagram of a can ...

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When we don't understand the details, it can cause much trouble. If a nation is overconfident that they will win a war, they will fight more wars. An investor that is to sure of their estimate of an asset's value will trade too much.

The world is too big to proces...

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Focusing on specific details in a complex system while ignoring the amount of detail contained within the system may at first show a benefit. However, it can create a massive collapse in the long-run.

In the late 18th century, the German government wanted to grow "scientific forests" t...

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  • Embrace meta-rationality. Know the limits of your own understanding, know when to consult experts, which experts to defer to, and when to admit that something is impossible for anyone to know.
  • Allow for uncertainty. Confident statements seem more p...

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