The adage “often wrong, never in doubt” may be an accurate assessment of the way many people think, a flaw that may lead to unsettling consequences.
In a new study, researchers investigated overprecision – excessive confidence in the accuracy of beliefs. Such overconfidence can lead to, among other things, overvaluing investments, inaccurate diagnosis by physicians and an intolerance of dissenting views.
New research confirms that overprecision is a common and robust form of overconfidence driven, at least in part, by excessive certainty in the accuracy of our judgments.
Investigators found that the more confident participants were about their estimates of an uncertain quantity, the less they adjusted their estimates in response to feedback about their accuracy and to the costs of being wrong.
“The findings suggest that people are too confident in what they know and underestimate what they don’t know,” said researcher Albert Mannes, Ph.D.
The new findings are published in the journal Psychological Science, a journal of the Association for Psychological Science.
Research investigating overprecision typically involves asking people to come up with a 90 percent confidence interval around a numerical estimate — such as the length of the Nile River. However, this approach doesn’t always faithfully reflect the judgments we have to make in everyday life.
We know, for example, that arriving 15 minutes late for a business meeting is not the same as arriving 15 minutes early, and that we ought to err on the side of arriving early.
Mannes, of The Wharton School of the University of Pennsylvania, and Don Moore, Ph.D., of the Haas School of Business at the University of California, Berkeley, performed three studies to account for the asymmetric nature of many everyday judgments.
In the first, participants estimated the local high temperature on randomly selected days and their accuracy was rewarded in the form of lottery tickets toward a prize.
For some trials, they earned tickets if their estimates were correct or close to the actual temperature (above or below); in other trials, they earned tickets for correct guesses or overestimates; and in some trials they earned tickets for correct guesses or underestimates.
The results showed that participants adjusted their estimates in the direction of the anticipated payoff after receiving feedback about their accuracy, just as Mannes and Moore expected.
But they didn’t adjust their estimates as much as they should have given their actual knowledge of local temperatures, suggesting that they were overly confident in their own powers of estimation.
Only when the researchers provided exaggerated feedback — in which errors were inflated by 2.5 times — were the researchers able to counteract participants’ tendency towards overprecision.
Experts say that the findings show that people all too often are overconfident in their beliefs of how things will happen.
“People frequently cut things too close — arriving late, missing planes, bouncing checks, or falling off one of the many ‘cliffs’ that present themselves in daily life,” said Mannes and Moore.
“These studies tell us that you shouldn’t be too certain about what’s going to happen, especially when being wrong could be dangerous. You should plan to protect yourself in case you aren’t as right as you think you are.”