Overprecision — excessive confidence in the accuracy of our
beliefs — can have profound consequences, inflating investors’ valuation of
their investments, leading physicians to gravitate too quickly to a diagnosis,
even making people intolerant of dissenting views. Now, 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.
The research, conducted by researchers Albert Mannes of The
Wharton School of the University of Pennsylvania and Don Moore of the Haas
School of Business at the University of California, Berkeley, revealed 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.