In the book Thinking, Fast and Slow, overconfidence has rightly been identified as the biggest culprit for several of the biggest tragedies in recent memory such as the Chernobyl disaster and the Titanic sinking. Overconfidence is equally bad in the business world as stated by the Nobel Prize winning economist Daniel Kahneman. So, a study was conducted by some academics on how to curb overconfidence, while promoting calibration. It emerged during this study that people who factor in unknown evidence find greater calibration between their accuracy in knowledge and their confidence levels. Considering the unknown factors and thus playing devil’s advocate lowered the overconfidence levels by8 percent during this business research. Confidence reduces only when the assumptions made are misplaced. Calibrating rather than second-guessing themselves ensures confidence levels do not dip away unnecessarily.

Source:https://knowledge.insead.edu/marketing/how-managers-can-curb-overconfidence-10036

Uploaded Date:27 October 2018