Chapter 2 Flashcards
(7 cards)
Why is overconfidence considered the “mother of all biases”?
is pervasive, powerful, and can lead to harmful consequences, such as wars, financial bubbles, lawsuits, and even disasters like Chernobyl. It can make people arrogant, careless, and overly self-centered, believing their judgments are accurate despite evidence to the contrary. However, in some cases, it may boost psychological resilience and well-being.
How does overconfidence facilitate other biases?
Overconfidence makes us less likely to double-check our opinions or correct flaws, as we tend to believe our views are correct even when there’s evidence suggesting otherwise. This reduces our willingness to question or adjust our beliefs.
What are the three types of overconfidence, and what do they mean?
Overprecision: Being too certain that our judgments and decisions are accurate. This bias makes us favor evidence confirming our beliefs over contradicting evidence, making us reluctant to revise our views.
Overestimation: Believing we are better, smarter, or more capable than we truly are. This includes thinking we have more control than we do, overestimating task completion speed (planning fallacy), and unrealistic optimism about our future.
Overplacement: Thinking we rank higher than others, especially in competitive settings. Although less common, underplacement (thinking we rank lower) can also occur, and both extremes are problematic.
What is the planning fallacy, and how does it relate to overconfidence?
The planning fallacy is the tendency to overestimate how quickly we can complete tasks, often based on an overly optimistic and idealized scenario. This is a form of overestimation, where we misjudge our own efficiency and control over time.
What is unrealistic optimism, and how does it affect decision-making?
Unrealistic optimism is the tendency to overestimate the positivity of our future. This bias can lead us to underestimate potential obstacles or challenges, causing us to make overly ambitious or risky decisions.
How does defensive pessimism differ from overconfidence?
Defensive pessimism involves making pessimistic assessments to manage expectations and avoid disappointment. Unlike overconfidence, which leans towards unrealistic optimism, defensive pessimism prepares people for potential setbacks by setting low expectations.
What is overplacement, and why can it be problematic?
Overplacement is the tendency to believe we rank higher than others in skills or qualities, especially in competitive contexts. This can lead to overestimating our abilities relative to others, potentially leading to competitive conflicts or failures. Underplacement, or underestimating our rank, also exists and can hinder confidence and performance. Both extremes can be problematic in decision-making.
