Can overconfidence harm you? Despite popular belief, psychologists and experts state that overconfidence can also lead to failure. Avoiding a different perspective can limit your judgment. How much confidence is good? How do you make sure you're not underconfident?

Don Moore, Associate Dean for Academic Affairs at Berkeley Haas talks about his book called Perfectly Confident: How To Calibrate Your Decisions Wisely. Together with host Greg, they unpack ways people can weigh their options properly. They cover topics like Confirmation Bias, the story of Jeff Rubin, and other tips on spotting overconfidence signals. 

Make sure to listen to the episode as he shares stories about the Good Judgment Project where they forecast and weigh in on political and diplomatic events based on understanding people’s perspectives. If you’re looking for a book that’ll guide the individual and team decision-making process, this one’s definitely a great read!

Episode Quotes:

On confirmation bias, causing us to miss signals that might affect our success:

“If we think about it in a Bayesian framework, one way that a lot of economists have modeled overconfidence is too tight a prior. That is we're too sure that our noisy private signal is accurate and underestimate the error and noise. That's built into it as a product of our idiosyncratic history or excessive faith in our intuitive judgment. You can think of confirmation bias as underweighting the informational value and evidence that we encounter.”

When does overconfidence benefit us?

"The public benefits of some circumstances in which overconfidence can lead to persistence. In excess of what expected value calculations might justify doesn't then imply everyone should be overconfident. We can be grateful to those who make sacrifices at their own expense without wanting to follow suit."

How can we prevent hierarchical decisions to affect the culture of diversity in the workplace?

“Trying to extract information from the crowd before the boss weighs in with his or her opinion. So one simple way to do that is before a meeting where you have to come to some important decision, you force everybody to vote to pre-commit or to identify their preferred list of candidates or outcome options or whatever it is that you're talking about.”

Show Links:

Order Book - Perfectly Confident: How To Calibrate Your Decisions

The Good Judgment Project

Other Books Mentioned:

Superforecasting The Art and Science of Prediction

Thinking in Bets: Making Smarter Decision When You Don’t Have All the Facts