Available online 8 June 2011 Confident leaders are seen as competent and capable by others. However, excessive amounts of confidence may be detrimental to a leader's performance. The purpose of the current study was to identify indicators of overconfidence and examine the influence that overconfidence has on certain kinds of leader performance. Results indicated two elements of overconfidence: ...

We study three distinct measures of overconfidence: (1) overestimation of one’s performance, (2) overplacement of one’s performance relative to others, and (3) overprecision in one’s belief about private signals. We show how a simple Bayesian model with uncertainty about task difficulty predicts overplacement and underestimation after unexpectedly easy tasks and underplacement and overestimatio...

Judges were asked to make numerical estimates (e.g., "In what year was the first flight of a hot air balloon?"). Judges provided high and low estimates such that they were X% sure that the correct answer lay between them. They exhibited substantial overconfidence: The correct answer fell inside their intervals much less than X% of the time. This contrasts with choices between 2 possible answers...

T research examines the development of confidence and accuracy over time in the context of forecasting. Although overconfidence has been studied in many contexts, little research examines its progression over long periods of time or in consequential policy domains. This study employs a unique data set from a geopolitical forecasting tournament spanning three years in which thousands of forecast...

Many studies have reported that the confidence people have in their judgments exceeds their accuracy and that overconfidence increases with the difficulty of the task. However, some common analyses confound systematic psychological effects with statistical effects that are inevitable if judgments are imperfect. We present three experiments using new methods to separate systematic effects from t...

Runeson, Juslin, and Olsson (2000) proposed (a) that perceptual learning entails a transition from an inferential to a direct-perceptual mode of apprehension, and (b) that relative confidence—the difference between estimated and actual performance—indicates whether apprehension is inferential or direct. In 3 experiments participants received feedback on judgments of force; the results replicate...

This paper studies the role of overconfidence in political behavior. We posit a simple model of overconfidence in beliefs. The model predicts that overconfidence leads to ideological extremeness, increased voter turnout, and increased strength of partisan identification. Moreover, the model makes many nuanced predictions about the patterns of ideology in society, and over a person’s lifetime. W...

This paper examines the effects of managerial overconfidence on bank risk taking and investigates whether improvements in governance can help to mitigate the adverse effects of managerial overconfidence on bank risk taking by using ordinary least squares method. The sample consists of the financial institutions in G20 and Taiwan over the period of 2005-2012. The executive overconfidence is meas...

Despite their strategic relevance in organizations, information technology (IT) investments still result in alarmingly high failure rates. As IT investments are such a delicate high-risk/high-reward matter, it is crucial for organizations to avoid flawed IT investment decision-making. Previous research in consumer and organizational decision-making shows that a decision’s accuracy is often infl...