The affective costs of overconfidence

Abstract

Positive illusions, though often beneficial (Taylor & Brown, 1988), can diminish the pleasure of outcomes. This prediction follows from decision affect theory. We investigated this prediction by measuring the confidence that recreational basketball players felt while making shots and the pleasure they felt with subsequent outcomes. Results showed that most players were overconfident. Those who were more overconfident tended to experience less enjoyment with their outcomes. Using individual parameter estimates from decision affect theory, we estimated how each player would have felt if their self assessments had been accurate. For the vast majority, better calibration would have led to greater pleasure. In a second study, we randomly assigned players to a debiasing treatment condition or a control condition. Relative to the control players, debiased players were better calibrated and derived greater average pleasure from the task.

The trouble with overconfidence.

“…Such is the case with social status, where overestimating one's status can lead to ostracism and intragroup conflict (Anderson, Srivastava, Beer, Spataro, & Chatman, 2006). And while there are some domains in which overconfidence can be adaptive, it can also undermine effort and performance (Stone, 1994;Vancouver, Thompson, Tischner, & Putka, 2002) and it can lead to greater disappointment when performance falls short of inflated expectations (McGraw, Mellers, & Ritov, 2004).…”

When overconfidence is revealed to others: Testing the status-enhancement theory of overconfidence

“…Constraints unrelated to status might limit its social benefits (Camerer & Lovallo, 1999;Dunning et al, 2004;Hayward & Hambrick, 1997;Odean, 1998). For example, overestimating one's task abilities might create a tendency to generate unrealistic goals, creating physical or psychological dangers (McGraw, Mellers, & Ritov, 2004). Upon discovering their overconfidence, individuals may also feel an ethical obligation to revise their beliefs.…”

The Multifold Relationship Between Memory and Decision Making: An individual-differences study

“…Overconfidence can lead to inappropriate risky behavior, while underconfidence can lead to inappropriate hesitation and inaction (for brief reviews see e.g., McGraw, Mellers & Ritov, 2004;Parker et al, 2012). In particular, the Under/Overconfidence task presents true/false factual statements, asking participants to judge if each statement is true or false and, immediately afterwards, to express their degree of confidence in each answer on a scale ranging from 50% (= just guessing) to 100% (= absolutely sure).…”