Perfectly Confident

Overconfidence and underconfidence are common and problematic. To calibrate them, weigh seven factors.

Most people have more confidence than the facts justify. Overconfidence is one of the most common cognitive biases. It is a “gateway bias” that leads to other biases – such as anchoring, representativeness or availability – that undermine decision-making. Overconfidence can adversely affect performance by reducing effort, inducing complacency or prompting embarrassing self-aggrandizement. Promoting overconfidence in children, for example, can make them fearful of risking failure. Collective overconfidence leads to disasters such as the 2008 financial crisis. 

Too little confidence means missing out on life. Lower-income high school graduates, for example, don’t apply to college because they don’t think they will get in; good writers don’t write because they think they are bad writers. Underconfidence is common, especially regarding difficult tasks where success is rare, and it’s easy to overestimate the competence level of the other people performing them.

Calibrate your level of confidence...