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Managing the overconfidence bias

  • 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.

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