OVERCONFIDENCE: HOW GOOD IS HAVING CONFIDENCE?

Confidence is like fire, extremely useful if used with control but incredibly dangerous if you lose control of it!

Today i want to talk about a very dangerous and little-known cognitive bias:?Overconfidence.

Having self-confidence is certainly one of the most functional qualities for achieving one's goals, but often excessive self-esteem leads us to take too many risks.

In fact, overconfidence has been blamed for several serious financial catastrophes, such as the dotcom bubble burst in the 1990s, the bank crash of 2008 and climate change.?

But let's see a definition first:

The overconfidence effect is observed when people's subjective confidence in their own ability is greater than their objective (actual) performance -?Pallier et al., 2002.

Overconfidence, in other words, occurs when we overestimate our predictive abilities and sin by presuming to be in control of the situation. This specific cognitive bias affects most individuals, both professionals and non-professionals, and develops over time.

This means that a person assigns himself wrong characteristics as his experience in a certain field increase, thus feeding overconfidence.

?How can we know whether we are estimating or overestimating our abilities?

There are some simple and interesting techniques we can put into practice to try to minimize this bias:

- Carefully evaluate each scenario before deciding.

Translated: "going off on a tangent" is dangerous. It is better to stop and think about the pros and cons of your idea and consider alternative possibilities.

- Get a second opinion

Expert advice can always be useful, even if only to show us reality from a different perspective.

-?Group advice: the devil's advocate (or as they said in World War Z, the tenth man theory)

In this film, in fact, they talk about the tenth man: "if nine people are convinced of one thing, the tenth has to find all the reasons to prove the opposite thing".

This situation is more commonly known as 'the devil's advocate', which means finding a person in the group to argue the opposite case, so that all points of view are always covered.

?With this in mind, do you want to know more about this bias and?how it is present in our lives?

Then don't miss our next newsletter, I have prepared a video in which I will reveal all this to you!

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