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raelity bytes - the author of blosxom
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Fri, 14 Aug 2009
Overconfidence - an optimal margin of illusion
As we grow older and more experienced, we overrate the accuracy of our judgments.
http://chance.dartmouth.edu/chancewiki/index.php/Chance_News_52
Chance news quotes from an article on the collapse of Bear Sterns:
"Cocksure: Banks, battles, and the psychology of overconfidence” by Malcolm Gladwell, The New Yorker, July 27, 2009
http://www.newyorker.com/reporting/2009/07/27/090727fa_fact_gladwell?currentPage=all
The author describes examples of a phenomenon that psychologists call the “illusion of control.” This phenomenon obtains when “confidence spills over from areas where it may be warranted (‘I’m savvier than that schnook’) to areas where it isn’t warranted at all (‘and that means I’m going to draw higher cards’).”
[A psychologist] had subjects engage in a betting game against either a self-assured, well-dressed opponent or a shy and badly dressed opponent (in Langer’s delightful phrasing, the “dapper” or the “schnook” condition), and she found that her subjects bet far more aggressively when they played against the schnook. They looked at their awkward opponent and thought, I’m better than he is. Yet the game was pure chance: all the players did was draw cards at random from a deck, and see who had the high hand. ”