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Overconfidence Explained

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This is a blog on why we believe and do what we do, why we pretend otherwise, how we might do better, and what our descendants might do, if they don't all die.
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Overconfidence Explained

Robin Hanson
Dec 21, 2011
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Overconfidence Explained

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We seem close to a good account of overconfidence:

We study a large sample of 656 undergraduate students, tracking the evolution of their beliefs about their own relative performance on an IQ test as they receive noisy feedback. … Subjects (1) place approximately full weight on their priors, but (2) are asymmetric, over-weighting positive feedback relative to negative, and (3) conservative, updating too little in response to both positive and negative signals. These biases are substantially less pronounced in a placebo experiment where ego is not at stake. We also find that (4) a substantial portion of subjects are averse to receiving information about their ability, and that (5) less confident subjects are more likely to be averse. We unify these phenomena by showing that they all arise naturally in a simple model of optimally biased Bayesian information processing … [of] agents who derive utility directly from their beliefs (for example, ego or anticipatory utility). (more; HT Dan Houser)

They also have results on how overconfidence relates to IQ and gender:

We show that agents who are of high ability according to our IQ quiz, and hence arguably cognitively more able, are just as conservative and asymmetric as those who score in the bottom half of the IQ quiz. … In our data women differ significantly in their priors, are significantly more conservative updaters than men while not significantly more asymmetric, and significantly more likely to be averse to feedback. These gender differences are consistent with our theoretical framework if a larger proportion of women than men value belief utility.

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Overconfidence Explained

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Overconfidence Explained

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Overcoming Bias Commenter
May 15

Has he avoided drama in the past?

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Overcoming Bias Commenter
May 15

Maybe he just wants to avoid the useless drama that always follows any such observation?

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