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Overconfidence: the bias of self-importance

In India, where the Church is a tiny minority, leaders need to be courageous and brave rather than overconfident and brash
Published: June 01, 2023 03:44 AM GMT

Updated: July 03, 2023 06:47 AM GMT

Catholic bishops in India walk to the altar for the installation ceremony of Bishop Poola Anthony as the new Archbishop of Hyderabad at Saint Mary's School grounds in Secunderabad, the twin city of Hyderabad, on Jan. 3, 2021

Catholic bishops in India walk to the altar for the installation ceremony of Bishop Poola Anthony as the new Archbishop of Hyderabad at Saint Mary's School grounds in Secunderabad, the twin city of Hyderabad, on Jan. 3, 2021. (Photo: AFP)

Recently, we have noticed that some Church leaders behave over-confidently and are risk-provoking, both in their words and actions. As such, overconfidence may become a bias that colors the behavior of authority figures.

We may overestimate our abilities in some areas due to overconfidence bias, a sort of cognitive bias. The majority of people think they are smarter, more trustworthy or have a better future than the typical person. As an illustration, 93 percent of American drivers assert that they are better drivers than the norm, which is statistically impossible.

Overconfidence bias is one of the most prevalent types of bias since it is so easy for human judgment to fall victim to it. It is also a highly significant one because it amplifies other biases that influence judgment, including action bias, optimism bias, and hindsight bias. Overconfidence in our own skills and self makes it more difficult for us to recognize our own biases and error-proneness.

The significance of overconfidence bias

Overconfidence bias prevents us from seeing our skills or knowledge objectively. We may develop irrational expectations as a result, which increases our susceptibility to disappointment.

Overconfident students, for instance, frequently make bad study choices, such as picking subjects they don't actually excel in. If we don't effectively judge the gap between what we already know and what we need to know, overconfidence bias may also prevent us from learning.

Overconfidence bias, however, has other negative effects as well. It also occasionally serves as the foundation for wise decisions, depending on the situation. For instance, overconfident managers usually strive for innovation and are more successful at convincing investors to fund riskier ventures that could lead to increased growth.

Overall, overconfidence bias is a double-edged sword and while it is present in successful people, it does not necessarily determine success.

Types of overconfidence bias

Overconfidence comes in three different forms. Each one has a unique psychological history, manifests itself under unique circumstances, and has a unique outcome.

  • Overestimating one's true abilities, performance, degree of control, or likelihood of success is referred to as overestimating. For instance, physicians may overestimate the precision of their diagnoses, workers may overestimate the speed at which they can complete a task, and people frequently exaggerate their level of control over circumstances.
  • Over placement (or "better-than-average") happens when most people estimate their own abilities as above average, despite the fact that this is statistically impossible for most people to do. For instance, 37 percent of engineers at one company rated themselves in the top 5 percent in performance during one research.

Overconfidence is the delusion that a person understands more than they do. It shows up as an excessive level of confidence in one's views' veracity. Numbers are used to express this conviction, typically with erroneous percentages or confidence ranges. For instance, when gamblers believe they can correctly predict what will come on the roulette wheel next, they display over-precision.

Some cases

A prevalent decision trap or way of thinking that might result in unfavorable choices is overconfidence bias. It is a trick that even professionals can fall for.

Overconfidence bias in business judgment, for instance, leads to company managers frequently underestimating the danger of breaking into a new market or launching a new product. Managers ignore the fierce competition that threatens their product's entry and sales in a new market because they are so confident that their product is original.

This may allow managers to enter the market successfully, but studies suggest that this entry has a lesser probability of surviving and could result in the company remaining in a non-profitable market for an extended period of time.

Experienced executives ought to be able to avoid making mistakes of this nature, but experience, level of expertise and prior successes all serve to amplify overconfidence bias.

Minimizing overconfidence bias

Overconfidence bias is challenging to totally eradicate since it occurs on an unconscious level. You can control it, though, by taking certain actions.

  • Conduct a "premortem" on your choices. Work backward, supposing that your choice resulted in a bad result, and consider all the potential causes of this. This enables you to foresee dangers and be more ready for unfavorable results.
  • Request opinions. You can find areas where you might need to improve by listening to other people's viewpoints, whether they originate from family members or coworkers. This will make you less likely to succumb to overconfidence bias.
  • Try to learn from your mistakes rather than becoming afraid of them. When a choice doesn't work out as you had hoped, consider what you could have done differently or what you could have avoided. This will help you make more informed judgments and prevent you from having unrealistic expectations for the future.

Conclusion

In a situation like India, where the Church is a tiny minority, the leaders cannot afford to have overconfidence bias. They need to own up to their spiritual roots, speak the truth to power when needed with humility and transparency, and be realistic about their own strengths and weaknesses. They need to be courageous and brave, not overconfident and brash.

*Jesuit Father Kuruvilla Pandikattu is a theologian and Chair Professor of the JRD Tata Foundation for Business Ethics at XLRI-Xavier School of Management in Jamshedpur, India. The views expressed in this article are those of the author and do not necessarily reflect the official editorial position of UCA News.

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