Tag: overconfidence

2 pages tagged overconfidence.

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Chapter 20: The Illusion of Validity — Thinking, Fast and Slow

Skilled professionals form confident predictions from coherent impressions — and remain confident even when confronted with evidence that their predictions are no better than chance. The feeling of validity is generated by coherence, not by predictive accuracy.
Chapter 24: The Engine of Capitalism — Thinking, Fast and Slow

Optimism bias is pervasive — most people believe they are above average and their plans will succeed at higher rates than the base rate. This bias is costly in many contexts but may be the psychological engine that drives entrepreneurial risk-taking and economic dynamism.