Overconfidence Bias: What It Is and How to Overcome It

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" to track and harvest timber. Underbrush was cleared, and tree species reduced. The first planting did well because of nutrients that were still left in the soil. But the clearing of underbrush reduced insect, mammal, and bird populations essential to soil building. Pests had few enemies left and infected the entire forest, resulting in massive forest death across the country.

• 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 promising but are open to hidden risks.
• Seek fingerspitzengefühl, roughly translated as intuitive knowledge. We all have some areas where we have a deep knowledge. We have to learn not to overestimate our own knowledge. To avoid overconfidence bias, learn more about your field of expertise.
• Build in a margin of safety. When an engineer designs a bridge that can support up to 100 cars at a time, they plan to hold a multiple of that amount, 200 or 300, as a margin of safety.