"Overconfidence and Some Behavioral Consequences"

November 18th 
Jeff Bailey - Business & Economics

Abstract: In many situations, people tend to be overconfident in their beliefs and judgments. In this colloquium, I will show that there are three main ways in which overconfidence has been defined and investigated. The three forms of overconfidence to be discussed are embodied in Lake Wobegon effects, over-estimation effects, and over-precision effects. Overconfidence is often associated with serious, negative behavioral consequences. Why then, is this judgment error so persistent? Overconfidence also has some positive consequences for both individuals and groups.