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The overconfidence effect is a well-established bias in which a person's subjective confidence in their judgments is reliably greater than the objective accuracy of those judgments, especially when confidence is relatively high. [1] [2] Overconfidence is one example of a miscalibration of subjective probabilities.
They argued that "the hard-easy effect has been interpreted with insufficient attention to the scale-end effects, the linear dependency, and the regression effects in data, and that the continued adherence to the idea of a 'cognitive overconfidence bias' is mediated by selective attention to particular data sets".
[6] For example, the representativeness heuristic is defined as "The tendency to judge the frequency or likelihood" of an occurrence by the extent of which the event "resembles the typical case." [13] The "Linda Problem" illustrates the representativeness heuristic (Tversky & Kahneman, 1983 [14]). Participants were given a description of "Linda ...
Overconfidence is a very serious problem, but you probably think it doesn't affect you. That's the tricky thing with overconfidence: The people who are most overconfident are the ones least likely ...
Created Date: 8/30/2012 4:52:52 PM
Why You Need to Do Your Research There are other takeaways from this study and others that can have a bearing on how you interpret professional advice and whether or not to act on it. For example:
In a 2011 article, Kahneman recounted the story of his discovery of the illusion of validity. After completing an undergraduate psychology degree and spending a year as an infantry officer in the Israeli Army, he was assigned to the army's Psychology Branch, where he helped evaluate candidates for officer training using a test called the Leaderless Group Challenge.
Recession fears for 2025 are fading fast, with market models and economist forecasts signaling a slim chance of economic contraction. But with optimism running high, could markets be misreading ...