WEBVTT - Overconfidence: The Icarus Paradox 0:00:03.000 --> 0:00:04.840 Welcome to Stuff to Blow Your Mind, a production of 0:00:04.880 --> 0:00:13.520 I Heart Radios How Stuff Works. Hey, you, welcome to 0:00:13.560 --> 0:00:15.600 Stuff to Blow Your Mind. My name is Robert Lamb 0:00:15.720 --> 0:00:17.880 and I'm Joe McCormick, and we're back with part two 0:00:17.960 --> 0:00:21.800 of our discussion of overconfidence. That's right. If you did 0:00:21.800 --> 0:00:24.920 not listen to the previous episode, do go back and 0:00:24.960 --> 0:00:27.560 listen to that episode, because we're gonna lay the ground work. 0:00:27.600 --> 0:00:31.920 We're going to discuss over confidence and hubrists and mythology 0:00:32.000 --> 0:00:35.920 in human histories, and then get into the psychology of 0:00:36.000 --> 0:00:39.519 it and what various psychological studies have revealed and continue 0:00:39.560 --> 0:00:42.599 to reveal about the nature of over confidence and how 0:00:42.640 --> 0:00:46.640 we can divide this sort of amorphous concept of over 0:00:46.720 --> 0:00:50.920 confidence out into categories that can be more easily studied 0:00:50.960 --> 0:00:53.639 and understood. That's right now. In the last episode, one 0:00:53.640 --> 0:00:55.520 of the main things we talked about was this huge 0:00:55.600 --> 0:00:58.560 new review of the scientific literature on something known as 0:00:58.560 --> 0:01:01.120 the better than average effect, which is the tendency for 0:01:01.160 --> 0:01:04.400 people to rate themselves as better than average with respect 0:01:04.400 --> 0:01:07.720 to their peers on all kinds of stuff. One classic 0:01:07.800 --> 0:01:11.240 example is that something like ninety three percent of people 0:01:11.360 --> 0:01:14.520 think they're a better than average driver. So if you're 0:01:14.520 --> 0:01:16.760 if you're listening to this as you drive, eyes back 0:01:16.760 --> 0:01:19.240 on the road, and make sure you use this turn signals. 0:01:19.319 --> 0:01:22.800 Turn signals, save lives, turn signals. Let other drivers and 0:01:22.840 --> 0:01:25.399 pedestrians know what you intend to do. Even if you 0:01:25.400 --> 0:01:27.920 think you're a great driver, drive like you're less good 0:01:27.959 --> 0:01:30.039 than you are, and it will make you a better driver. 0:01:30.280 --> 0:01:32.760 Drive like you can't see all the other cars and 0:01:32.800 --> 0:01:35.720 pedestrians around you, because sometimes you cannot drive like you're 0:01:35.800 --> 0:01:39.880 driving a murder weapon, because potentially you are. It's quite true, 0:01:40.480 --> 0:01:42.080 all right. Now. One of the things we talked about 0:01:42.080 --> 0:01:46.040 in the last episode was a paper from seventeen by 0:01:46.120 --> 0:01:50.120 Don Amore and Derek Schatz called the Three Faces of Overconfidence, 0:01:50.560 --> 0:01:55.320 which which actually broke over confidence down into three distinct 0:01:55.440 --> 0:02:00.040 categories of of bias or misperception and uh. And we 0:02:00.040 --> 0:02:01.640 we talked about those a little bit last time. We're 0:02:01.640 --> 0:02:03.640 going to be exploring more of what that paper had 0:02:03.680 --> 0:02:07.720 to say, and it's critiques of overconfidence research, specifically with 0:02:07.800 --> 0:02:10.480 reference to these three types of overconfidence. And as a 0:02:10.520 --> 0:02:16.240 brief refresher, the three types are overestimation, overplacement, and over precision. 0:02:16.680 --> 0:02:19.960 Overestimation is thinking that you're better than you are, and 0:02:20.000 --> 0:02:22.359 this would be with reference to some kind of uh, 0:02:22.400 --> 0:02:24.840 you know, objective measure out in the world. So if 0:02:24.880 --> 0:02:27.480 you think that you are taller than you are, you know, 0:02:27.560 --> 0:02:30.000 if you think that you can jump higher than you can, 0:02:30.520 --> 0:02:32.880 if you think that you would get a better score 0:02:32.880 --> 0:02:36.760 on a test than you actually could, that's overestimation. The 0:02:36.840 --> 0:02:41.200 next one, overplacement, is similar, but instead it's comparing yourself 0:02:41.240 --> 0:02:44.399 with other people. So the better than average effect would 0:02:44.400 --> 0:02:47.600 be an example of overplacement. It's, you know, thinking you 0:02:47.639 --> 0:02:51.240 are better than average compared to your peers at some task. 0:02:51.760 --> 0:02:54.200 Or it would be thinking that you know that you 0:02:54.320 --> 0:02:57.560 work harder than other people, or thinking that you are 0:02:57.680 --> 0:03:00.639 smarter than other people. Of course, with the if, it's 0:03:00.680 --> 0:03:03.799 over confidence, meaning that those are not actually accurate assessments. 0:03:04.360 --> 0:03:07.280 And then finally the other one would be over precision, 0:03:07.360 --> 0:03:10.800 which is being too sure that you know the truth. Again, 0:03:10.840 --> 0:03:13.800 this this might be called epistemic over confidence. It's just 0:03:13.960 --> 0:03:17.040 being too certain that your beliefs are correct. Now, to 0:03:17.080 --> 0:03:21.280 get into more in chats is paper from. One of 0:03:21.280 --> 0:03:25.400 the questions that they address is what actually drives some 0:03:25.520 --> 0:03:29.000 of these different effects as as they are manifested so 0:03:29.480 --> 0:03:33.480 they start with overestimation. What causes us to say think 0:03:33.560 --> 0:03:35.640 we would get a better score on a test than 0:03:35.680 --> 0:03:37.720 we do, or to think we have more money in 0:03:37.760 --> 0:03:41.040 the bank than we do. A common answer that people 0:03:41.080 --> 0:03:44.280 give to this is the idea of wishful thinking. It 0:03:44.320 --> 0:03:48.280 would feel good if this were true, therefore I believe it. Right. Uh. 0:03:48.480 --> 0:03:52.119 The authors don't think that this explanation is very plausible, 0:03:52.120 --> 0:03:54.480 and they offer several problems with it, and we can 0:03:54.520 --> 0:03:56.880 interrogate these, maybe disagree with them as we go on. 0:03:57.000 --> 0:03:59.480 But first of all, they say, you know, self delusion 0:03:59.720 --> 0:04:04.880 is demonstrably maladaptive. For example, a tendency toward wishful thinking 0:04:04.960 --> 0:04:07.760 about the safety of kissing sharks so with tongue is 0:04:08.240 --> 0:04:10.680 not a trait that the environment will tend to select for. 0:04:11.440 --> 0:04:14.920 People overconfident about their academic abilities will tend not to 0:04:14.960 --> 0:04:19.279 study and actually do worse. People who believe themselves invulnerable 0:04:19.320 --> 0:04:22.400 will take risks that sometimes get them killed. This might 0:04:22.440 --> 0:04:25.159 seem obvious, but there is actually plenty of research on this. 0:04:25.279 --> 0:04:28.960 I mean, people who are overconfident about their abilities do 0:04:29.200 --> 0:04:31.960 face a lot of downsides when those abilities are put 0:04:32.000 --> 0:04:35.719 to the test. Yeah, I mean, one example from literature 0:04:35.720 --> 0:04:39.000 that comes to mind is that of Macbeth, who believes 0:04:39.080 --> 0:04:43.600 himself protected by prophecy um and then of course uh 0:04:43.880 --> 0:04:48.280 snuffs it because yeah, exactly. But then again, I think, okay, 0:04:48.360 --> 0:04:50.320 so it is true that these people will face a 0:04:50.360 --> 0:04:54.520 lot of downside, But then again, people do engage in 0:04:54.600 --> 0:04:57.760 self destructive, self deluded behavior all the time. I mean, 0:04:57.760 --> 0:04:59.720 this is a common feature of human life. Yeah we 0:05:00.000 --> 0:05:02.320 I mean, for instance, we were just recently talking about 0:05:02.360 --> 0:05:05.640 the Placebo effect on our movie episode where we talked 0:05:05.640 --> 0:05:08.520 about the fly and and about the possibility that the 0:05:08.520 --> 0:05:12.919 Polacebo effect is basically due to uh, you know, this 0:05:13.040 --> 0:05:18.000 innate tendency towards self delusion that may very well be adaptive. 0:05:18.040 --> 0:05:21.640 And at least in this scenario, um, where yeah, we 0:05:21.640 --> 0:05:24.960 we benefit from being able to believe something is going 0:05:25.000 --> 0:05:29.160 to work and and uh and and and experiencing at 0:05:29.200 --> 0:05:32.279 least a small physical benefit from it, like a small 0:05:32.320 --> 0:05:35.640 curative benefit from it. And then um, you know, I 0:05:35.720 --> 0:05:38.560 also can't help but think that, you know, self delusion 0:05:39.320 --> 0:05:42.320 entails far more than just over confidence. It also entails 0:05:42.320 --> 0:05:45.480 all manner of paranoia. And there is a strong case 0:05:45.680 --> 0:05:48.480 for the adaptive nature of say making a type one 0:05:48.640 --> 0:05:51.760 error in cognition, a false positive, the belief that the 0:05:51.839 --> 0:05:53.920 rustle in the tall grass is that of a tiger 0:05:54.000 --> 0:05:56.800 when it's not, because if you make the type two 0:05:57.279 --> 0:06:01.720 uh or, you're more likely to be eaten by the tiger. Right, right, Yeah, 0:06:01.960 --> 0:06:05.679 having accurate information about the world is actually very useful, 0:06:05.720 --> 0:06:09.479 and having inaccurate information can kill you. Yeah, but but 0:06:09.520 --> 0:06:11.320 I'm not so much you know, trying to to disagree 0:06:11.320 --> 0:06:15.800 with the maladaptive self delusion argument that we mentioned earlier, 0:06:15.839 --> 0:06:17.560 but but rather you know, to point out that the 0:06:17.600 --> 0:06:21.120 human experiences is rife with self delusions. So might a 0:06:21.279 --> 0:06:25.279 dash of overconfidence, even in the form of overestimation, served 0:06:25.320 --> 0:06:28.040 to balance outh this alchemy of you know, of our 0:06:28.120 --> 0:06:31.839 perception of reality. For example, so you have a karaoke singer, 0:06:32.000 --> 0:06:35.880 and granted karaoke is very low stakes, but you could 0:06:35.920 --> 0:06:40.039 involve social embarrassment, which you could fear would lead to ostracism, 0:06:40.120 --> 0:06:42.960 and that's actually one of the most powerful negative motivators 0:06:42.960 --> 0:06:46.080 on human behavior. Right, But again, at karaoke is also 0:06:46.120 --> 0:06:47.919 one of these things where like sometimes it's cool to 0:06:47.920 --> 0:06:50.240 do it badly. So this is not a perfect example, 0:06:50.600 --> 0:06:53.600 but so you have a kara karaoke singer that imbibes 0:06:53.640 --> 0:06:56.480 in a little liquid courage before taking the microphone, as 0:06:56.680 --> 0:07:01.040 most karaoke participants are are are wont to do. Uh, 0:07:01.040 --> 0:07:03.240 but yeah, they get a little liquid courage because they 0:07:03.279 --> 0:07:05.240 know they don't have the greatest voice in the world. 0:07:05.320 --> 0:07:07.440 And then they feel a little awkward getting up there. 0:07:07.440 --> 0:07:09.560 But but they know that a little bit of booze 0:07:09.560 --> 0:07:12.800 induced over confidence might help matters. I think you're exactly 0:07:12.880 --> 0:07:14.800 right there, and this this is funny to start here 0:07:14.840 --> 0:07:17.239 because I think while the authors make tons of good points, 0:07:17.240 --> 0:07:18.720 this is one of the ones they make that I 0:07:18.800 --> 0:07:21.840 might disagree with the most. I think that there are 0:07:21.960 --> 0:07:26.560 antagonistic adaptations in human behavior. One pressure might favor having 0:07:26.640 --> 0:07:29.120 an accurate picture of the world, assessing things in a 0:07:29.200 --> 0:07:33.040 clear and accurate way, while a cross pressure favor self deception, 0:07:33.440 --> 0:07:36.920 especially self deception in the form of over confidence. For example, 0:07:37.440 --> 0:07:40.280 you might be more likely to survive if you have 0:07:40.480 --> 0:07:43.640 accurate assessments of your own abilities, but you might be 0:07:43.760 --> 0:07:47.640 more likely to take big risks with potentially big rewards 0:07:47.960 --> 0:07:52.480 if you overestimate your abilities or self delusional. Over Confidence 0:07:52.480 --> 0:07:55.680 could be adaptive because it helps us persuade or even 0:07:55.720 --> 0:08:00.520 deceive other people about our worth. Yeah, Ultimately you have 0:08:00.560 --> 0:08:03.200 to you have to believe in yourself if you know 0:08:03.240 --> 0:08:05.160 other people are not going to believe in you for you, 0:08:05.240 --> 0:08:07.320 right right. I mean, we we talked in the last 0:08:07.360 --> 0:08:10.440 episode about how it's probably not a coincidence that you 0:08:10.560 --> 0:08:14.480 really often notice over confidence in people who occupy high 0:08:14.520 --> 0:08:17.680 status leadership roles. How they get there. I mean, it's 0:08:17.720 --> 0:08:20.400 not hard to imagine the overconfidence helped them get to 0:08:20.440 --> 0:08:23.040 that point. Yeah, and it's, uh, sometimes it's a fun, 0:08:23.120 --> 0:08:27.440 sometimes terrifying exercise to like if you if you engage 0:08:27.480 --> 0:08:29.440 with people like this and then when you realize, oh, 0:08:29.720 --> 0:08:32.559 they're just really overconfident, they don't they're they're not to 0:08:32.600 --> 0:08:36.160 say they're not skilled, but when you realize they're not. 0:08:36.360 --> 0:08:38.800 Sometimes they're not. But sometimes you really you realize, oh, 0:08:38.840 --> 0:08:42.640 there there is this gap between ability and uh and 0:08:42.640 --> 0:08:45.360 and and what they're they're saying they're going to deliver 0:08:45.480 --> 0:08:48.800 on or what they are estimating the future will consist of. Yeah, 0:08:48.840 --> 0:08:52.640 I mean, I it is kind of shocking how often 0:08:52.679 --> 0:08:55.680 in life you will suddenly come to a realization that 0:08:56.000 --> 0:08:58.520 you know, the boss or the leader or whatever's main 0:08:58.600 --> 0:09:01.320 skill is b essing, like that they can just go 0:09:01.400 --> 0:09:03.280 out there and wing it in a way that you 0:09:03.320 --> 0:09:06.880 would be too timid and reserve to do. Right now, 0:09:06.920 --> 0:09:09.640 this idea of you know, accurate assessments playing into our 0:09:09.920 --> 0:09:13.080 our own abilities, I couldn't help but think of the 0:09:13.120 --> 0:09:16.160 film Butch Casting and the Sun Dance Kid in this scenario, 0:09:17.200 --> 0:09:20.000 because it really as it relates to two specific points 0:09:20.040 --> 0:09:22.960 in the film. One is the whole would you make 0:09:23.000 --> 0:09:25.720 that jump if you didn't have to scenario where they're 0:09:25.720 --> 0:09:28.520 being tracked, they're being hunted, and they've come to this, uh, 0:09:28.600 --> 0:09:33.120 this this cliff overlooking this river, and they realize that 0:09:33.200 --> 0:09:35.520 if they jump, if they jump off this cliff and 0:09:35.520 --> 0:09:38.320 they land in that river and they don't die, they'll 0:09:38.360 --> 0:09:41.880 get away because the stakes are such that those pursuing 0:09:41.920 --> 0:09:44.400 them will not follow them, they will not make that 0:09:44.480 --> 0:09:49.560 jump if they don't need to. Um. So, so so 0:09:49.600 --> 0:09:51.560 there's there's that, and then at the very end there's 0:09:51.679 --> 0:09:53.959 kind of a going out the old fashioned way guns 0:09:54.000 --> 0:09:56.920 ablazing scenario where they're cornered, they're going to slowly be 0:09:57.280 --> 0:09:59.040 killed and they decided to just go for it, to 0:09:59.120 --> 0:10:03.800 just bust out shooting and just fight. Right. So, so 0:10:03.840 --> 0:10:08.520 the incentives, like the evolutionary incentives on a brain generating 0:10:08.559 --> 0:10:12.760 accurate pictures of the world versus self deluded over confidence. 0:10:13.120 --> 0:10:15.680 Those could very well be just the contrast between a 0:10:15.800 --> 0:10:19.360 low risk, low reward strategy versus a high risk, high 0:10:19.360 --> 0:10:22.199 reward strateke right, Yeah, so yeah, the first example definitely 0:10:22.320 --> 0:10:25.400 high risk, high reward. Like it was pretty much their only, 0:10:26.200 --> 0:10:29.280 their best option for survival at that point, and they 0:10:29.320 --> 0:10:32.360 took it, and in the film they survive. At the 0:10:32.480 --> 0:10:35.360 end of the film, it's pretty much implied that they die. 0:10:35.840 --> 0:10:39.240 But but at the same time, it's it still seems 0:10:39.240 --> 0:10:41.440 to be their best option, if not their best option 0:10:41.520 --> 0:10:44.880 for surviving. It's kind of at least a like the 0:10:44.920 --> 0:10:47.560 psychological best option. You know, are we gonna stay in 0:10:47.600 --> 0:10:50.240 here and die like rats, or are we gonna you know, 0:10:50.679 --> 0:10:54.000 just burst out there and you know, die like heroes 0:10:54.040 --> 0:10:57.160 in a film that is named after them. You know, man, 0:10:57.200 --> 0:10:58.640 that's a great movie. I want to go back and 0:10:58.679 --> 0:11:01.680 why I haven't seen the Garsh remember, except the end, 0:11:01.720 --> 0:11:04.080 I mean, the ending is kind of a downer, but uh, 0:11:04.120 --> 0:11:07.280 but yeah, it's it's it's surprisingly sweet for for a 0:11:07.360 --> 0:11:10.880 violent outlaw movie. Yeah, it's a good one. And you know, 0:11:10.920 --> 0:11:13.160 I mentioned Macbeth earlier in the whole idea of you know, 0:11:13.240 --> 0:11:16.760 draping himself in prophecy and using that to to to 0:11:16.760 --> 0:11:20.040 to pump himself up. But that doesn't bring up bring 0:11:20.080 --> 0:11:22.160 to mind the role of religion and all of this, 0:11:22.280 --> 0:11:24.840 you know, I mean certainly a lot of the things 0:11:24.920 --> 0:11:30.640 that religion can do to your estimation of ability or 0:11:30.679 --> 0:11:33.720 you know, uh, you know, it can revolve around you know, 0:11:33.800 --> 0:11:36.880 the survivability of the soul for example, you know, and 0:11:36.920 --> 0:11:39.600 like what will happen if I act a certain way 0:11:39.640 --> 0:11:42.440 in life? Yeah, and I think there could possibly be 0:11:42.520 --> 0:11:45.080 cross pressure is going the same way with that. I 0:11:45.080 --> 0:11:48.560 mean that that there are some evolutionary drawbacks and some 0:11:48.559 --> 0:11:50.679 some advantages to it, right. And then of course that's 0:11:50.720 --> 0:11:54.640 not to say that religious motivations, uh, you know exist 0:11:54.920 --> 0:11:57.640 free of social of course, I guess you know, there's 0:11:57.640 --> 0:11:59.960 going to be a rich interplay between those, and that's 0:12:00.640 --> 0:12:02.439 you know, that's something that comes up, for instance, in 0:12:02.679 --> 0:12:06.319 um when you look at studies of say, suicide bombers, 0:12:06.679 --> 0:12:08.680 you know, where on one hand, you can look at 0:12:08.720 --> 0:12:10.719 it and just go with the simple scenario of oh, 0:12:10.760 --> 0:12:13.280 here's a person who believes that if they die doing 0:12:13.320 --> 0:12:16.280 this act, then they'll be rewarded in the afterlife. But 0:12:16.360 --> 0:12:19.320 then behind that there's a whole social scenario as well 0:12:19.840 --> 0:12:23.720 of other humans, you know, telling them that this is 0:12:23.720 --> 0:12:27.120 the thing to do, et cetera. Yeah, motivations are are 0:12:27.200 --> 0:12:30.600 a rich stew of many different influences. I mean, it's 0:12:30.679 --> 0:12:34.280 usually hard to nail down a single inciting incident or 0:12:34.360 --> 0:12:37.760 cause that lead people down a path in life. And 0:12:37.800 --> 0:12:39.320 in fact, I think a lot of times even when 0:12:39.320 --> 0:12:41.679 people do that with themselves and say this was the 0:12:41.679 --> 0:12:44.240 reason I became or whatever I did, whatever, I think 0:12:44.240 --> 0:12:46.200 a lot of times they're over some they're they're wrong 0:12:46.200 --> 0:12:50.320 about themselves. Yeah, so basically self delusion, we're all just 0:12:50.640 --> 0:12:55.000 houses of cards, just ready to be knocked down at 0:12:55.000 --> 0:12:57.640 any point. Well, but there's another way of putting it. Now. 0:12:57.760 --> 0:12:59.640 One thing you and I could be getting wrong here 0:12:59.720 --> 0:13:03.840 is if we're talking properly about self delusion or some 0:13:04.040 --> 0:13:07.600 other type of of bias or like misperception in the brain. 0:13:08.040 --> 0:13:12.359 Because the authors here they're saying, okay, self delusion specifically, 0:13:12.920 --> 0:13:16.560 maybe self delusion implies that there's there's a sort of 0:13:16.600 --> 0:13:19.679 transformation going on somewhere in the brain, Like the brain 0:13:19.800 --> 0:13:23.880 gets accurate information about the world and then just somehow 0:13:23.960 --> 0:13:27.319 presents it to the conscious mind in a skewed way. 0:13:27.559 --> 0:13:29.920 The authors share think that, especially if you're talking about 0:13:29.920 --> 0:13:33.240 wishful thinking, is the brand of self delusion, uh, you know, 0:13:34.200 --> 0:13:37.000 getting false perceptions about the world in order to feel better. 0:13:37.120 --> 0:13:39.680 They think that doesn't really work from a like unconscious 0:13:39.720 --> 0:13:43.520 mind to conscious mind model, because emotions and moods also 0:13:43.600 --> 0:13:46.079 seem to emerge from the unconscious mind, not from the 0:13:46.120 --> 0:13:49.320 conscious mind. But then there's another thing they go to, 0:13:49.679 --> 0:13:52.760 which is that they argue the empirical evidence for true 0:13:52.760 --> 0:13:57.000 self deception in overestimation it's actually kind of weak and 0:13:57.080 --> 0:14:00.280 kind of mixed. Why would this be Well, first of all, 0:14:00.320 --> 0:14:03.280 they say, it's hard to separate true self deception from 0:14:03.559 --> 0:14:07.640 attempts to deceive others, including the researchers. So how can 0:14:07.679 --> 0:14:12.800 you tell when somebody truly overestimates their own traits or 0:14:12.840 --> 0:14:17.240 abilities versus they just tell you that they think their 0:14:17.480 --> 0:14:19.960 traits or abilities are better than they are. In a 0:14:19.960 --> 0:14:24.600 lot of cases, both would manifest equally as outward over confidence. Now, 0:14:24.600 --> 0:14:27.040 you can come up with some methodologies and some tests 0:14:27.040 --> 0:14:28.960 to try to get around this, Like you can make 0:14:29.040 --> 0:14:33.160 people bet sums of money that would where the outcome 0:14:33.200 --> 0:14:35.400 of the bet would be dependent on how good they 0:14:35.440 --> 0:14:38.560 actually are at a task or something. But in a 0:14:38.560 --> 0:14:40.240 lot of cases, they say, it's hard to tell the 0:14:40.280 --> 0:14:45.040 difference between true self deception and just attempts to deceive 0:14:45.120 --> 0:14:47.600 other people. Another thing they point out is that you 0:14:47.640 --> 0:14:52.680 don't actually have to be deceiving yourself to overestimate your abilities. 0:14:53.040 --> 0:14:56.880 You could be genuinely completely ignorant of the fact that 0:14:56.920 --> 0:14:59.440 you're not as good as you think you are. Uh. 0:14:59.440 --> 0:15:02.680 And here's in place that the famous Dunning Krueger effect 0:15:02.760 --> 0:15:05.920 comes in. Now, you may have heard about the Dunning 0:15:05.960 --> 0:15:09.360 Krueger effect, but very short sketch on it. Of course, 0:15:09.400 --> 0:15:11.440 overlaps with a lot of what we're talking about today. 0:15:11.920 --> 0:15:16.240 Participants less skilled in a task or subject area can 0:15:16.280 --> 0:15:20.440 be prone to show even greater overestimation of their abilities 0:15:20.480 --> 0:15:24.120 in that skill or subject area. So with some skills, 0:15:24.160 --> 0:15:28.880 the worst you are, the more you overestimate your awesomeness. Now, 0:15:29.080 --> 0:15:31.320 why why on earth would this be? Well, the authors 0:15:31.360 --> 0:15:34.240 here mentioned this could just simply come from your low 0:15:34.360 --> 0:15:38.080 skills providing you with a poor frame of reference. You 0:15:38.160 --> 0:15:42.080 don't know enough about this task or skill or subject 0:15:42.160 --> 0:15:46.200 area to even understand how much you don't know, so 0:15:46.320 --> 0:15:49.400 like the Dunning Krueger effect would show not self deception 0:15:49.760 --> 0:15:54.160 but genuine ignorance. You lack enough information to understand how 0:15:54.240 --> 0:15:57.400 bad you're failing. Like I think a good example of 0:15:57.400 --> 0:16:00.000 this is you know, you read you you read one 0:16:00.040 --> 0:16:04.240 theory about some phenomena and uh, and it can be 0:16:04.360 --> 0:16:06.920 rather convincing. It can be so convincing that you think, well, 0:16:06.960 --> 0:16:09.560 this is it. They made a great case. But if 0:16:09.560 --> 0:16:11.440 you don't, if if you don't actually look at some 0:16:11.480 --> 0:16:14.480 of the other theories out there or look at uh, 0:16:14.520 --> 0:16:16.840 you know, some sort of if you look at writings 0:16:16.920 --> 0:16:19.600 or or or pieces that actually compare them, or do 0:16:19.720 --> 0:16:22.480 some sort of meta analysis, then you don't really have 0:16:22.600 --> 0:16:25.120 a proper frame of reference or even like sort of 0:16:25.160 --> 0:16:27.280 I wouldn't even say like nothing like a perfect frame 0:16:27.280 --> 0:16:29.800 of reference, but even say like a healthy frame of reference. Yes, 0:16:29.920 --> 0:16:32.480 you can go so like you read one article about 0:16:32.480 --> 0:16:34.760 a subject and then you're an expert, and then you 0:16:34.800 --> 0:16:38.360 start reading more and you realize like, oh wait a minute, 0:16:38.360 --> 0:16:40.680 you know there's so much I don't understand that your 0:16:40.800 --> 0:16:44.000 estimation of your own expertise drops sharply after Yeah, you 0:16:44.120 --> 0:16:46.480 like you might realize, oh, well, there are other theories, 0:16:46.600 --> 0:16:48.360 or you might realize, oh, well, this was just one 0:16:48.440 --> 0:16:52.440 person's summary of this particular theory, and oh and then 0:16:52.560 --> 0:16:55.000 on top of that, perhaps they had a particular acts 0:16:55.040 --> 0:16:58.240 to grind in writing it, etcetera. Yeah, that's a great example. 0:16:58.280 --> 0:17:00.000 I mean not to say that you should doubt every 0:17:00.360 --> 0:17:02.400 you read, but I mean, yeah, you should have. You 0:17:02.400 --> 0:17:04.800 should you should have healthy doubt, not you know, not 0:17:04.960 --> 0:17:08.800 denial ism, but but you know, just be aware that 0:17:08.880 --> 0:17:12.400 you don't know everything, and you should be especially suspicious 0:17:12.440 --> 0:17:15.920 when you have dipped your toes into a subject and 0:17:15.960 --> 0:17:19.000 now feel that you fully understand it. And we say 0:17:19.040 --> 0:17:23.960 that as a professional toe dippers. Uh. Now, finally, they 0:17:23.960 --> 0:17:27.399 point out that the empirical evidence for wishful thinking itself 0:17:27.480 --> 0:17:29.960 in general as a psychological phenomenon. They say, this is 0:17:30.000 --> 0:17:33.840 not actually strong. Uh. If if there were strong evidence 0:17:33.920 --> 0:17:37.439 for wishful thinking, wouldn't it be the case that more 0:17:37.480 --> 0:17:42.240 desirable outcomes would be more strongly believed? And they say, no, 0:17:42.840 --> 0:17:45.240 studies that try to test this out do not find 0:17:45.280 --> 0:17:47.159 this to be the case. It's not the case that 0:17:47.280 --> 0:17:49.720 the more you want something, the more you believe it 0:17:49.760 --> 0:17:52.719 to be true. And there are only a few types 0:17:52.760 --> 0:17:55.320 of scenarios where there's any evidence of this at all, 0:17:55.640 --> 0:17:59.119 such as scenarios where all outcomes are equally likely, like 0:17:59.160 --> 0:18:02.040 a dice roll or something. Now that is interesting to 0:18:02.080 --> 0:18:05.639 think of in terms of dungeons and dragons, were frequently 0:18:05.720 --> 0:18:07.920 one is either making an attack or doing some sort 0:18:07.960 --> 0:18:10.960 of attempting, some sort of act that requires a skill check. 0:18:11.680 --> 0:18:15.080 And I find myself doing this. You'll you go up 0:18:15.119 --> 0:18:17.439 there and you begin to explain what your character is 0:18:17.480 --> 0:18:20.040 going to do, as if you hit that natural twenty 0:18:20.400 --> 0:18:23.600 that's kind of the Yeah, So I find myself engaging 0:18:23.600 --> 0:18:26.359 in a lot of that level of overconfidence with my 0:18:26.440 --> 0:18:29.119 character because ultimately it all comes down to the roll 0:18:29.200 --> 0:18:31.919 of the dice. You know, unless I'm trying to you know, 0:18:32.840 --> 0:18:35.159 leap off of the democ organ's head or something, that 0:18:35.280 --> 0:18:38.399 is going to be extremely difficult because they're going to 0:18:38.480 --> 0:18:42.480 be additional numerical you know values, uh, you know, addages 0:18:42.520 --> 0:18:45.120 attracted from the attempt. You know, ultimately it's still gonna 0:18:45.119 --> 0:18:47.760 be one to twenty one being uh, you know, a 0:18:47.800 --> 0:18:50.639 pretty much complete fail. Uh. You know that's gonna be 0:18:50.680 --> 0:18:52.960 the one where you slip and stab yourself with your 0:18:52.960 --> 0:18:55.640 own sword, or it's gonna be that natural twenty, which 0:18:55.720 --> 0:18:58.200 is going to be you know, the wonder hit where 0:18:58.200 --> 0:19:01.959 you do extra damage. That is fantastic example. I I 0:19:02.040 --> 0:19:04.879 was trying to think of cases where I thought I 0:19:04.960 --> 0:19:07.919 really did engage in wishful thinking, and I couldn't think. 0:19:07.960 --> 0:19:10.800 I'm sure I do sometimes. But yeah, they say it's 0:19:10.840 --> 0:19:12.920 not actually as common as people think it is. And 0:19:13.200 --> 0:19:15.640 here's maybe one case. Yeah, I think in Dungeons and Dragons, 0:19:15.680 --> 0:19:18.040 I have yet to meet a player or be a 0:19:18.080 --> 0:19:21.360 player that does not engage in will wishfull thinking. Every 0:19:21.359 --> 0:19:23.760 time you roll the dice, like nobody nobody rolls that 0:19:23.800 --> 0:19:25.520 dice and it says, all right, this is how I'm 0:19:25.520 --> 0:19:28.880 going to fall off this table or this is how 0:19:28.920 --> 0:19:32.159 I'm going to fall into the next trap, and uh, 0:19:32.359 --> 0:19:35.639 and you know, and skewer myself on a stake. No, 0:19:35.800 --> 0:19:37.639 we want the best outcome and we we have it 0:19:37.640 --> 0:19:41.960 in our mind before the dice puts us in our place. Now, 0:19:42.000 --> 0:19:44.120 another thing that the authors here bring up is that 0:19:44.720 --> 0:19:48.280 overestimation itself. Remember again, that's just thinking that you are 0:19:48.320 --> 0:19:50.439 better than you are in some way in terms of 0:19:50.480 --> 0:19:54.320 abilities or traits or something. Um that this actually has 0:19:54.359 --> 0:19:57.480 a mixed evidential record. It's not always the case that 0:19:57.520 --> 0:20:01.440 we overestimate ourselves on all quality, easier tasks. It's more 0:20:01.560 --> 0:20:03.840 the case for some things in particular, And they give 0:20:03.880 --> 0:20:06.679 a couple of examples of things where there really is 0:20:06.720 --> 0:20:10.680 a ton of evidence for consistent overestimation. One is something 0:20:10.680 --> 0:20:13.720 you brought up in the last episode, Robert, the planning fallacy. 0:20:14.680 --> 0:20:19.399 There is really good evidence that people consistently overestimate how 0:20:19.520 --> 0:20:22.920 fast they'll be able to get things done or complete 0:20:22.920 --> 0:20:26.320 a project of some kind. And this is especially true 0:20:26.600 --> 0:20:30.320 if the project is difficult and novel. So like, if 0:20:30.359 --> 0:20:32.719 I try to, you know, I put together some complex 0:20:32.800 --> 0:20:34.880 thing for you to do that's hard and you've never 0:20:34.920 --> 0:20:39.119 done it before, you are really likely to massively underestimate 0:20:39.119 --> 0:20:41.000 how much time it's going to take you. Right if 0:20:41.040 --> 0:20:43.000 you're like, well, you know, I'm not a handyman, but 0:20:43.240 --> 0:20:46.760 I think I'm gonna install this sink myself, and then 0:20:46.800 --> 0:20:50.880 you watch a weekend just vanish. Yeah, I know that feeling. 0:20:51.520 --> 0:20:54.320 Another one that they cite is the illusion of control. 0:20:54.400 --> 0:20:58.760 People pretty consistently overestimate how much control they were they 0:20:58.760 --> 0:21:02.000 will have over future. It comes even things that that 0:21:02.080 --> 0:21:05.199 they should understand are basically random. Right, you see this 0:21:06.600 --> 0:21:09.800 financially in business wise. A lot of times where someone 0:21:09.840 --> 0:21:12.439 will have they think they have a clear idea of 0:21:12.480 --> 0:21:14.639 like how things are going to flow, but they're they're 0:21:14.680 --> 0:21:18.720 just not taking into account all the factors they cannot control, 0:21:19.359 --> 0:21:22.639 and say the economy or you know, or or or 0:21:22.720 --> 0:21:25.640 just the industry that they're a part of. But they're 0:21:25.720 --> 0:21:28.640 kind of they're acting, they're making choices based on sort 0:21:28.640 --> 0:21:31.080 of like a not even a best case scenario, but 0:21:31.200 --> 0:21:34.679 sort of like a standard scenario. You know, Yeah, I 0:21:34.680 --> 0:21:36.280 think I know what you mean. Like they're they're not 0:21:36.400 --> 0:21:38.639 counting on the storm, and they're also not counting on 0:21:38.720 --> 0:21:41.919 the wind to completely die away, and that's how they're basing, 0:21:42.240 --> 0:21:44.080 you know, their their estimate of how long it's going 0:21:44.160 --> 0:21:46.879 to take to sail across the sea. Oh yeah, I 0:21:46.880 --> 0:21:49.600 mean that that's another thing, like we there's actually a 0:21:49.680 --> 0:21:51.880 name for this. I've forgotten it at the moment. Maybe 0:21:51.920 --> 0:21:54.120 I'll call it to mind in a second. But it's 0:21:54.160 --> 0:21:57.680 the the assumption that the future will be like the present. Yeah, 0:21:57.760 --> 0:22:01.880 maybe it's called the continuation fallaci ores thing um. But 0:22:02.000 --> 0:22:03.919 now there's one more thing that they bring up with 0:22:03.960 --> 0:22:08.320 respect to overestimation, specifically, uh and This is a standard 0:22:08.359 --> 0:22:11.600 finding that applies to a lot of the research on overestimation. 0:22:11.840 --> 0:22:16.280 It's called the hard easy distinction or the hard easy effect. 0:22:16.800 --> 0:22:19.200 And uh that this one is interesting because we'll see 0:22:19.200 --> 0:22:21.919 some variations with it in other types of overconfidence. But 0:22:22.040 --> 0:22:25.639 it goes like this, we are more likely to overestimate 0:22:25.640 --> 0:22:30.040 our abilities on hard tasks and underestimate our abilities on 0:22:30.119 --> 0:22:34.600 easy ones. So again, like the hard project comes up 0:22:35.240 --> 0:22:39.240 with the planning fallacy, you massively underestimate how much time 0:22:39.280 --> 0:22:41.879 it's going to take you to do that hard, complex, 0:22:41.920 --> 0:22:45.120 novel thing, but then you might overestimate how much time 0:22:45.160 --> 0:22:47.040 it's going to take you to do something that's a 0:22:47.119 --> 0:22:50.480 common easy task. I guess that the main example that's 0:22:50.480 --> 0:22:52.960 coming to mind on this one would be the scenario 0:22:53.080 --> 0:22:57.480 where driving across town, are going to a particular destination 0:22:57.560 --> 0:22:59.480 takes less time than you think it will, and then 0:22:59.480 --> 0:23:03.080 you show up like fifteen minutes early or were worse. Yeah, 0:23:03.080 --> 0:23:06.400 and the authors here have some explanations for how exactly 0:23:06.400 --> 0:23:07.679 this is working that we'll get to in a bit. 0:23:07.680 --> 0:23:09.720 Should we take a break, Yes, we should, and when 0:23:09.720 --> 0:23:12.320 we come back we will continue our journey through over confidence. 0:23:13.920 --> 0:23:18.080 Thank alright, we're back all right, So we've been talking 0:23:18.119 --> 0:23:21.200 about this paper about over confidence, about the three types 0:23:21.240 --> 0:23:24.320 of overconfidence by shots and more. We were just talking 0:23:24.320 --> 0:23:27.040 about overestimation, the belief that you're better than you are, 0:23:27.119 --> 0:23:30.399 especially with respect to some kind of objective measure or 0:23:30.440 --> 0:23:33.199 independent measure. And so we want to move on to 0:23:33.240 --> 0:23:36.919 the next type of overconfidence they talk about, which is overplacement. 0:23:37.040 --> 0:23:39.879 And again this is different from overestimation because this is 0:23:40.359 --> 0:23:43.600 thinking that you're better than you are with respect to 0:23:43.680 --> 0:23:47.439 other people and judging yourself compared to others. Now, the 0:23:47.440 --> 0:23:51.080 authors have some methodological critiques of some of the literature here, 0:23:51.080 --> 0:23:53.879 but they acknowledge there's a lot of evidence for overplacement, 0:23:54.200 --> 0:23:57.400 citing the better than average effect in all its beastly forms, 0:23:57.440 --> 0:23:59.879 like in the other paper that we talked about that was, 0:24:00.200 --> 0:24:03.840 you know, recently found to be extremely robust. Uh. They've 0:24:03.840 --> 0:24:06.800 got some quibbles about methodology and some of these studies, 0:24:06.920 --> 0:24:10.240 like using ambiguous scales or measures. Robert, you were talking 0:24:10.240 --> 0:24:12.520 I think in the last episode about you know how 0:24:12.560 --> 0:24:14.800 some of these types of things like uh, you know, 0:24:14.880 --> 0:24:19.640 how people rate themselves in terms of attractiveness or intelligence 0:24:19.720 --> 0:24:23.119 or something. These can of course suffer from ambiguous criteria, 0:24:23.400 --> 0:24:27.640 right yeah, or sometimes just straight up unfair criteria, racist criteria, UM, 0:24:27.800 --> 0:24:32.320 misogynistic criteria, etcetera. Well, yeah, it absolutely has all those 0:24:32.359 --> 0:24:35.560 negative effects. I mean, I think overplacement is like it's 0:24:35.600 --> 0:24:37.560 behind a lot of the worst types of prejudices that 0:24:37.600 --> 0:24:40.960 make themselves known. But even if you're just like looking 0:24:41.000 --> 0:24:44.040 at what is the quality you're trying to measure, you know, 0:24:44.520 --> 0:24:47.879 attractiveness or something like that, that there's usually not like 0:24:48.080 --> 0:24:50.480 a way of rating that is, it's all based on 0:24:50.520 --> 0:24:54.359 these kind of ambiguous subjective judgments. One great example of 0:24:54.400 --> 0:24:57.040 this is something that we've brought up several times already, 0:24:57.119 --> 0:25:02.159 like the driving example. So Svinson in one did a 0:25:02.200 --> 0:25:06.880 study where he discovered that nine percent of American drivers 0:25:07.000 --> 0:25:11.920 rated themselves above the median and driving ability. Obviously, whatever 0:25:12.080 --> 0:25:16.439 criterion you use, it's impossible for to be above the media, 0:25:16.440 --> 0:25:19.560 and it would have to be you know, like, um, 0:25:19.640 --> 0:25:22.520 the majority can be above average, but the majority cannot 0:25:22.520 --> 0:25:25.119 be above the median. And the authors point out this 0:25:25.160 --> 0:25:27.919 would be more impressive if it were more specific, because 0:25:28.320 --> 0:25:31.240 due to this problem with like ambiguous scales or measures, 0:25:31.600 --> 0:25:35.600 anybody could technically have their own definition of what makes 0:25:35.600 --> 0:25:39.040 a good driver, So you could be answering that, thinking like, well, 0:25:39.080 --> 0:25:41.760 there are things that I do well when I drive, 0:25:41.840 --> 0:25:44.520 and maybe they're different from what somebody else thinks that 0:25:44.640 --> 0:25:48.040 they do well when they drive, and that's their criterion, right, 0:25:48.080 --> 0:25:50.480 I mean, your your definition of being a good driver 0:25:50.640 --> 0:25:52.800 could just be I did not you know, I wasn't 0:25:52.840 --> 0:25:54.480 in a wreck on the way to work this morning, 0:25:54.480 --> 0:25:56.639 you know, Or or it could be I get the 0:25:56.680 --> 0:26:00.560 places I need to go fast like in those those 0:26:00.560 --> 0:26:03.919 are definitely, you know, not necessarily the same vision of 0:26:03.960 --> 0:26:06.840 good driving. Or I look really cool when I do it, 0:26:06.960 --> 0:26:10.120 you know. Uh. There's another thing they bring up which 0:26:10.160 --> 0:26:14.240 is interesting, which is the role of self selection in 0:26:14.240 --> 0:26:18.240 increasing the apparent prevalence of over confidence in the real world. 0:26:18.600 --> 0:26:22.080 So an example would be like this, On average, more 0:26:22.119 --> 0:26:25.760 overconfident people are likely to apply for jobs just sort 0:26:25.760 --> 0:26:29.520 of by definition, right, more overconfident people are likely to 0:26:29.600 --> 0:26:34.240 start businesses, to run for office, So we're we're exposed 0:26:34.440 --> 0:26:37.760 to more of these people, and this could lead to 0:26:37.880 --> 0:26:41.480 us thinking that their confidence level is more represented in 0:26:41.520 --> 0:26:44.399 the general population than it actually is. Oh yeah, you 0:26:44.440 --> 0:26:47.719 turn on the television. It's what it's almost exclusively overly 0:26:47.760 --> 0:26:50.280 confident people, that's true. Yeah, So if you just look 0:26:50.320 --> 0:26:56.120 at like business leadership, politics, celebrities, all this, you're gonna see. 0:26:56.160 --> 0:26:59.000 I think you will see in general way more over 0:26:59.080 --> 0:27:02.520 confidence than just will talking to your friends and relatives 0:27:02.520 --> 0:27:05.639 and co workers. Now here's a really interesting thing. Remember 0:27:05.680 --> 0:27:08.200 we talked about the hard easy effect or the easy 0:27:08.240 --> 0:27:13.440 heart effect with overestimation, where people tend to overestimate their 0:27:13.480 --> 0:27:19.359 abilities on hard jobs and underestimate their abilities on easy jobs. Apparently, 0:27:19.600 --> 0:27:23.840 for overplacement, it's there's also an easy heart effect, but 0:27:24.000 --> 0:27:29.360 it's in the exact opposite direction. With overplacement, you overplace 0:27:29.440 --> 0:27:33.600 yourselves relative. We overplace ourselves relative to others on easy, 0:27:33.760 --> 0:27:39.160 common tasks and underplace ourselves relative to others on difficult, unusual, 0:27:39.359 --> 0:27:42.440 or rare ones. So again, what would be some examples 0:27:42.480 --> 0:27:45.560 of this? Uh, you think you're in the ninety percentile 0:27:45.640 --> 0:27:48.280 of drivers, but really you're in the forty. This is 0:27:48.320 --> 0:27:52.200 an easy common task. On the other hand, people think 0:27:52.280 --> 0:27:56.880 that they are less likely than others to win difficult competitions. Uh. 0:27:56.920 --> 0:28:00.200 Studies show that when there's a teacher that decides to 0:28:00.359 --> 0:28:03.760 make an exam harder and graded on a curve, students 0:28:03.800 --> 0:28:07.080 expect their grades to be worse than others, even when 0:28:07.080 --> 0:28:09.240 there's common knowledge that there will be a curve. So 0:28:09.280 --> 0:28:12.400 as the test gets harder, students perceived that they will 0:28:12.440 --> 0:28:17.120 do worse relative to other classmates. That's kind of interesting. Uh. 0:28:17.160 --> 0:28:20.080 They point out that people believe they are worse jugglers 0:28:20.080 --> 0:28:23.399 than other people. They believe that they are less likely 0:28:23.480 --> 0:28:26.160 to win the lottery than other people. Again a difficult, 0:28:26.240 --> 0:28:30.400 rare thing, uh, And that they here's here's a very 0:28:30.440 --> 0:28:33.800 interesting version. Just in terms of ages. People believe they 0:28:33.800 --> 0:28:37.600 are less likely than other people to live past one hundred, 0:28:37.960 --> 0:28:40.760 but they also think they're more likely than other people 0:28:40.800 --> 0:28:44.600 to live past seventy. Interesting. Well, of course, both of 0:28:44.640 --> 0:28:46.640 those kind of depends on where you are in the 0:28:46.640 --> 0:28:49.440 age spectrum when you're making that estimation, you know, because 0:28:49.480 --> 0:28:52.360 you could be I mean, I mean, but apparently it's 0:28:52.360 --> 0:28:55.600 true of all age, but also your quality of life, right, 0:28:55.640 --> 0:28:58.360 I mean, for some people that prospect of living two hundred, 0:28:58.920 --> 0:29:02.040 Depending on where you are health wise, that might be terrifying. 0:29:02.120 --> 0:29:05.280 That might be it might be wishful thinking that you'll 0:29:05.280 --> 0:29:08.080 expire sooner than that, uh, or it could be the 0:29:08.120 --> 0:29:11.360 other way around, you know. Um, what kind of explanations 0:29:11.360 --> 0:29:14.440 are they They throwing out, Yeah, this was interesting, So yeah, 0:29:14.480 --> 0:29:17.000 why do we fail in opposite directions here? Depending on 0:29:17.080 --> 0:29:20.680 whether we're imagining our performance against objective measures versus relative 0:29:20.680 --> 0:29:23.760 to others, and the author's site solutions from some of 0:29:23.840 --> 0:29:28.479 Moore's previously previous work with other authors, they write this quote. 0:29:28.720 --> 0:29:32.080 If people make any errors estimating how well they've done 0:29:32.240 --> 0:29:35.040 or will do, then it stands to reason they're more 0:29:35.080 --> 0:29:38.520 likely to overestimate a low score and the more likely 0:29:38.560 --> 0:29:42.400 to underestimate a high score. That's the herd easy effect. 0:29:42.760 --> 0:29:46.240 As long as people have more uncertainty about others scores, 0:29:46.560 --> 0:29:49.800 they'll tend to make even more regressive estimates of others 0:29:49.880 --> 0:29:53.600 than of self. The consequence would be that they overestimate 0:29:53.640 --> 0:29:57.440 others even more than themselves on difficult tasks and come 0:29:57.480 --> 0:29:59.920 to believe that they are worse than others. The oppos 0:30:00.080 --> 0:30:03.200 that would hold true for easy tasks. People would underestimate 0:30:03.240 --> 0:30:06.360 others more than themselves and wind up believing that they 0:30:06.360 --> 0:30:09.480 are better than others. So that took me a minute 0:30:09.480 --> 0:30:11.240 to get my head around, but then I finally made 0:30:11.280 --> 0:30:13.800 sense of it. So when you're not sure how you 0:30:13.800 --> 0:30:16.120 will do it, something, as we're always you know, not 0:30:16.200 --> 0:30:19.320 sure there's a ton of uncertainty in life, or you're 0:30:19.360 --> 0:30:22.520 not sure how others will do. They're simply more room 0:30:22.680 --> 0:30:26.480 for possibility to guess high if your performance is likely 0:30:26.520 --> 0:30:29.440 to be low, and more room to guess low if 0:30:29.440 --> 0:30:32.640 your performance is likely to be high. And this applies 0:30:32.680 --> 0:30:35.920 to both the self and other people. Since we know 0:30:36.080 --> 0:30:39.160 even less about other people than we do about ourselves, 0:30:39.360 --> 0:30:42.160 we're going to spend more time guessing wrong in these 0:30:42.240 --> 0:30:45.680 vast over and under zones for other people, depending on 0:30:45.760 --> 0:30:48.160 what type of task it is. Now we're going to 0:30:48.240 --> 0:30:52.080 talk about over precision from this two thousand seventeen study. Now, 0:30:52.080 --> 0:30:54.880 over precision again is that that's like having way more 0:30:55.000 --> 0:30:58.640 confidence than you should about what you believe to be true. 0:30:59.040 --> 0:31:00.640 So I could ask you, you know, I could ask 0:31:00.680 --> 0:31:02.520 you to answer a question, Then I could ask you 0:31:02.600 --> 0:31:06.280 how confident you are that your answer is correct? Uh. 0:31:06.360 --> 0:31:10.080 And the authors here right quote results routinely find that 0:31:10.240 --> 0:31:15.720 hit rates inside confidence intervals are below fifty percent, implying 0:31:15.720 --> 0:31:18.920 that people set their ranges too precisely, acting as if 0:31:18.920 --> 0:31:22.520 they're inappropriately confident that their beliefs are accurate. So, if 0:31:22.560 --> 0:31:26.120 you take a quiz, you say you're more than confident 0:31:26.200 --> 0:31:28.560 on average about your answers, and you're actually more like 0:31:28.640 --> 0:31:32.239 fifty percent correct on average. This is something that's been 0:31:32.240 --> 0:31:35.480 found a bunch of times. It's quite clear that there's 0:31:35.560 --> 0:31:39.520 tons of over precision in human behavior. The authors have 0:31:39.560 --> 0:31:42.720 a few critiques about like common research paradigms that that 0:31:42.760 --> 0:31:45.240 are used to study this. One example is they say, 0:31:45.560 --> 0:31:47.640 you know it. It may be that normal people don't 0:31:47.640 --> 0:31:50.880 have a very solid understanding of how to use confidence intervals, 0:31:50.880 --> 0:31:53.080 so there have been other ways of trying to measure it. 0:31:53.840 --> 0:31:57.040 But however, the authors here believe that over precision is 0:31:57.120 --> 0:32:00.560 the most pervasive form of over confidence. You find it 0:32:00.840 --> 0:32:04.640 absolutely every everywhere, even in experts talking about their own 0:32:04.720 --> 0:32:06.760 subject matter. I think that's come up on the show 0:32:06.800 --> 0:32:09.600 before that, I don't remember when. After this, the authors 0:32:09.640 --> 0:32:12.120 here turned to the question UH, a question we talked 0:32:12.120 --> 0:32:16.000 about a little before. Could over confidence actually be useful? Like? 0:32:16.360 --> 0:32:18.440 How do why does it make sense for a brain 0:32:18.520 --> 0:32:21.960 to be overconfident? Uh? And they talk about explanations in 0:32:22.040 --> 0:32:27.000 two main categories, intra personal and interpersonal UH. The authors 0:32:27.160 --> 0:32:31.320 generally think the evidence for the interpersonal explanations the the 0:32:31.360 --> 0:32:34.840 explanations and how it works on other people are stronger 0:32:34.880 --> 0:32:37.840 than the intra personal ones, though there kid could be 0:32:37.880 --> 0:32:41.000 some good intra personal ones. For example, you know, maybe 0:32:41.000 --> 0:32:43.920 over confidence doesn't just make you feel good, it, as 0:32:43.960 --> 0:32:47.760 we hypothesized earlier, makes you more likely to take risks 0:32:47.840 --> 0:32:50.840 that can pay off big. Yeah. Well, I mean, for instance, 0:32:50.880 --> 0:32:53.360 to come to to go to like a predator prey 0:32:53.400 --> 0:32:58.520 scenario like one is reminded of the you know, how 0:32:58.560 --> 0:33:02.280 effective your average editor is. You know they're going to 0:33:02.320 --> 0:33:06.200 fail a lot. And granted, a leopard is not really 0:33:06.520 --> 0:33:11.200 subject to human uh, you know, over confidence or under confidence, 0:33:11.560 --> 0:33:13.840 but certainly if you if you if you look at 0:33:13.840 --> 0:33:16.600 a human scenario, if you look at human hunters, uh, 0:33:16.680 --> 0:33:18.840 you know it, it's certainly a situation where it would 0:33:18.840 --> 0:33:22.960 pay to be overconfident, uh, to a certain degree. Yeah, 0:33:23.000 --> 0:33:25.520 I think you can find some analogies of confidence and 0:33:25.560 --> 0:33:28.320 over confidence and animals like you know, how likely are 0:33:28.320 --> 0:33:31.600 you to try to take down prey animal that you're 0:33:31.680 --> 0:33:34.480 very unlikely to succeed against, but you know, would provide 0:33:34.520 --> 0:33:36.240 you with a lot of meat and energy if you 0:33:36.320 --> 0:33:38.640 do right. Though, of course, the reverse of the other 0:33:38.680 --> 0:33:40.400 side of that is that you would not need want 0:33:40.400 --> 0:33:42.840 to be so overconfident that you were going after prey 0:33:43.120 --> 0:33:45.240 that was extremely likely to kill you if you try 0:33:45.320 --> 0:33:48.680 to bring it down right. But the authors here they 0:33:48.720 --> 0:33:52.280 do think that there's really good evidence for interpersonal benefits 0:33:52.280 --> 0:33:55.560 for over confidence. One example would be all the empirical 0:33:55.600 --> 0:33:59.160 evidence that already exists that just outwardly projecting confidence has 0:33:59.200 --> 0:34:01.920 all these benefit fits affecting how other people see us. 0:34:02.280 --> 0:34:05.040 There are studies that show that highly confident people are 0:34:05.080 --> 0:34:09.880 more persuasive, they're more influential, they're perceived as more sexually attractive, 0:34:09.960 --> 0:34:14.240 they tend to get promoted to positions of authority in groups. Um, 0:34:14.320 --> 0:34:17.640 And it's possible that confidence is actually more important than 0:34:17.680 --> 0:34:21.680 competence in determining who gets promoted to high status positions 0:34:22.239 --> 0:34:25.360 the author's right quote. While a preference for confident leaders 0:34:25.440 --> 0:34:28.920 may make sense if there's a correlation, however, weak, between 0:34:28.960 --> 0:34:32.359 confidence and competence, there is real risk in selecting over 0:34:32.400 --> 0:34:35.959 confident leaders. Well, I mean, because on one hand, you 0:34:35.960 --> 0:34:38.239 you want a boss that can say, you know, do 0:34:38.320 --> 0:34:41.280 their job and and keep the company afloat and actually 0:34:41.480 --> 0:34:45.000 grow the business, etcetera, all the various catchphrases. But you 0:34:45.040 --> 0:34:46.839 also want a boss that you can kind of like 0:34:47.280 --> 0:34:49.040 you can. You can you can trust that they're doing 0:34:49.080 --> 0:34:53.080 their thing like they seem confident. I guess they have 0:34:53.200 --> 0:34:54.960 their whole end of it figured out, and maybe I 0:34:54.960 --> 0:34:57.560 can focus on my own thing and not my own 0:34:57.680 --> 0:35:00.279 role in the company without you freaking out a what's 0:35:00.280 --> 0:35:03.520 going to happen tomorrow? Well, maybe in the business scenario 0:35:03.600 --> 0:35:07.319 we should pivot to talking about the Icarus paradox. Oh, 0:35:07.400 --> 0:35:08.960 all right, we're gonna take a quick break, but we'll 0:35:09.000 --> 0:35:14.680 be right back with more than thank and we're back. So, Robert, 0:35:14.760 --> 0:35:17.240 you wanted to bring in a concept from the business 0:35:17.239 --> 0:35:21.239 world about overconfidence, the Icarus paradox. Yeah, And I'm as 0:35:21.280 --> 0:35:23.280 surprised as maybe some of you are that I'm bringing 0:35:23.280 --> 0:35:26.280 in a something business wise, but it caught my attention 0:35:26.320 --> 0:35:29.040 when I was looking for things on for papers and 0:35:29.040 --> 0:35:32.319 so forth, on over confidence, and also looking at Greek 0:35:32.360 --> 0:35:35.920 mythology and so forth, because yeah, the Acarus paradox invokes 0:35:36.080 --> 0:35:38.920 the story of Charask rather directly. And I think it 0:35:38.960 --> 0:35:40.800 also makes sense at another level, because you know, we 0:35:40.840 --> 0:35:43.839 don't have gods so much anymore, Like these are not 0:35:43.880 --> 0:35:48.799 the driving commanding forces in our world, but we do 0:35:48.840 --> 0:35:53.120 have institutions, industries, global economies. And these are not unlike 0:35:53.120 --> 0:35:56.240 the concepts of the gods, right. You know, they're sometimes lawful, 0:35:56.320 --> 0:35:59.640 sometimes chaotic entities that are likely to destroy you if 0:35:59.680 --> 0:36:02.759 you question their authority, or if you you you turn 0:36:02.800 --> 0:36:06.480 against them. But anyway, I ran across this interesting concept 0:36:06.560 --> 0:36:10.240 of the acress paradox um. It was devised by Canadian 0:36:10.239 --> 0:36:14.120 economist Danny Miller, and he points out that businesses are 0:36:14.200 --> 0:36:18.080 often like Icarus in the myth. They start out confident 0:36:18.120 --> 0:36:22.680 and competent, they rise, but then they perish. Uh. The 0:36:22.680 --> 0:36:24.839 The irony, he writes, is that many of the most 0:36:24.920 --> 0:36:30.480 dramatically successful companies are prone to this exact sort of failure. Uh. 0:36:30.520 --> 0:36:33.000 And and it doesn't necessary in the business sense, since 0:36:33.080 --> 0:36:36.719 businesses are sometimes less likely to die. They're more like 0:36:36.760 --> 0:36:39.279 the gods. You know, they're they have downfalls, but there 0:36:39.320 --> 0:36:43.319 may be they may very well be immortal in some cases. Right, 0:36:43.360 --> 0:36:45.399 they're still alive. They're just chained to a rock getting 0:36:45.440 --> 0:36:48.680 their liver pecked out by an eagle, right for eternity. 0:36:48.760 --> 0:36:52.680 You know, maybe they just declare multiple bankruptcies. Immortal declares bankruptcy. 0:36:52.680 --> 0:36:56.080 It's a different thing than than a corporation doing it. Um. Wait, 0:36:56.120 --> 0:36:59.239 what is that eagle? It's like a private equity eagle. Yeah, 0:36:59.239 --> 0:37:02.799 the private ECU eagle. Um. And yeah, he mentioned several 0:37:02.800 --> 0:37:04.920 companies and discussing this, and and most of them I 0:37:04.920 --> 0:37:06.839 think that he was discussing are still around like they 0:37:06.840 --> 0:37:10.799 have survived their downfalls. Uh. But yeah, yeah. He writes 0:37:10.800 --> 0:37:13.520 that the irony is that that many of these dramatically 0:37:13.560 --> 0:37:15.839 successful companies are prone to these sort of failures. And 0:37:15.880 --> 0:37:19.240 what's more, the very factors that drive success, when taken 0:37:19.280 --> 0:37:23.600 to excess, are the factors that bring about decline. So 0:37:23.880 --> 0:37:25.640 I think this is an interesting model to look at, 0:37:25.680 --> 0:37:27.840 not only for the you know, because it's a just 0:37:27.880 --> 0:37:29.480 to take on it from the business world, but I 0:37:29.480 --> 0:37:31.520 think he can also serve as sort of a reflecting 0:37:31.560 --> 0:37:34.800 pool for some of the individual concepts that we've discussed 0:37:34.800 --> 0:37:37.880 already by placing them out outside of the human psyche 0:37:37.880 --> 0:37:40.319 and looking at them in the context of an organization 0:37:40.440 --> 0:37:44.920 or a culture. So Miller wrote a book about this, 0:37:45.200 --> 0:37:49.120 The Icarous Paradox, How Exceptional Companies bring about their own downfall. 0:37:49.440 --> 0:37:53.280 New Lessons in the Dynamics of Corporate success, Decline, and Renewal. 0:37:53.320 --> 0:37:56.240 I know you love a long title like that. Um. 0:37:56.280 --> 0:38:00.440 But I also I was mainly looking at his Business 0:38:00.719 --> 0:38:03.640 Horizons article that he wrote on the subject, and he 0:38:03.680 --> 0:38:07.560 summarizes a lot of the key points. So Miller identified 0:38:07.760 --> 0:38:13.920 four key to trajectories in the riches to rags business scenario. 0:38:14.600 --> 0:38:17.960 So the first one that he mentions is the focusing trajectory. 0:38:18.040 --> 0:38:23.040 In this trajectory, the craftsman becomes the tinker quote firms 0:38:23.080 --> 0:38:30.279 whose insular, technocratic monocultures alienate customers with perfect but irrelevant offerings. 0:38:30.320 --> 0:38:32.480 So I guess in a scenario would be, you know, 0:38:32.960 --> 0:38:36.560 the company that creates a really groundbreaking product, and then 0:38:36.640 --> 0:38:40.319 all they do is tinker with that concept. All they 0:38:40.360 --> 0:38:44.160 do is make adjustment to that concept, and eventually, like 0:38:44.280 --> 0:38:46.719 somebody else is going to create a better widget or 0:38:46.760 --> 0:38:50.279 a better you know, smartphone, or whatever the situation may be, 0:38:50.600 --> 0:38:52.839 somebody else is going to take some some you know, 0:38:52.880 --> 0:38:57.600 some wider swings. Next comes the venturing trajectory, and this 0:38:57.680 --> 0:39:01.200 is by which builders become imperial list And this one, 0:39:01.239 --> 0:39:03.160 I think is the one that really has the smack 0:39:03.239 --> 0:39:07.520 of overconfidence to it. In this trajectory, the strategy of 0:39:07.600 --> 0:39:12.040 building feeds into over expansion. The goal of growth becomes 0:39:12.120 --> 0:39:16.719 grandeur and an entrepreneurial culture becomes one of the gamesman, 0:39:17.520 --> 0:39:22.080 A divisionalized structure becomes fractured. And then on top of 0:39:22.120 --> 0:39:25.400 that there's the the inventing trajectory. This is where you 0:39:25.440 --> 0:39:29.040 go from pioneering to escapist. In this trajectory, innovation feeds 0:39:29.080 --> 0:39:34.799 into high tech escapism. Science for society transforms into technological utopianism. 0:39:34.840 --> 0:39:37.520 Research and development gives way to think tank culture, and 0:39:37.520 --> 0:39:41.600 the overall culture goes from organic to chaotic. And then 0:39:41.800 --> 0:39:45.400 he rounds us out with the decoupling trajectory from salesman 0:39:45.480 --> 0:39:51.480 to drifter quote. Finally, the decoupling trajectory transforms salesman organizations 0:39:51.480 --> 0:39:55.680 with unparalleled marketing skills, prominent brand names, and broad markets 0:39:56.000 --> 0:40:00.600 into aimless, bureaucratic drifters whose sales fetish obscure is design 0:40:00.640 --> 0:40:03.799 issues and who produce a stale and disjointed line of 0:40:03.880 --> 0:40:06.879 me to offerings. Okay, so that's the company that's more 0:40:06.920 --> 0:40:10.480 based around marketing culture than around having a good product, right. 0:40:10.600 --> 0:40:13.160 You know. Thinking about these trajectories kind of reminds me 0:40:13.239 --> 0:40:16.719 of the peaking in high school stereotype. In life trajectories, 0:40:17.160 --> 0:40:19.239 it's a stereotype, but there is some truth to it. 0:40:19.360 --> 0:40:22.040 I think it's possible that too much success early on 0:40:22.120 --> 0:40:24.680 in life can kind of corrupt a person and can 0:40:24.760 --> 0:40:27.200 kind of corrupt your work ethic, your ability to learn 0:40:27.280 --> 0:40:30.759 from mistakes and mature. It's important for people to experience 0:40:30.800 --> 0:40:34.360 both successes and failures early in life. Yeah, yeah, I 0:40:34.600 --> 0:40:36.560 think so. It kind of comes back to what we 0:40:36.600 --> 0:40:41.360 talked about looking at considering Aristotle's uh summary of hubrists 0:40:41.360 --> 0:40:43.560 saying that the the young and the rich were the 0:40:43.600 --> 0:40:46.080 most likely to engage in it, and the idea that 0:40:46.120 --> 0:40:49.400 perhaps in some scenarios, certainly there there are plenty of 0:40:49.440 --> 0:40:53.080 examples of very wealthy people who got there through defeat, 0:40:53.280 --> 0:40:56.040 like through learning the lessons of defeat. There are also 0:40:56.080 --> 0:40:59.320 examples of of people who have you know, arguably maybe 0:40:59.360 --> 0:41:02.279 you know, never suffered a true defeat like they have. 0:41:02.680 --> 0:41:05.680 They have remains sort of man children, uh kind of 0:41:05.719 --> 0:41:08.600 failed upward. Yeah, that sort of thing. Um. And again 0:41:08.600 --> 0:41:11.880 we're dealing abroad tropes here. But you know, to some extent, 0:41:11.960 --> 0:41:16.280 I think it's useful to consider, uh, to consider these um. 0:41:16.320 --> 0:41:18.480 But but also I feel like it it does get 0:41:18.480 --> 0:41:22.319 too into the idea that that when we're dealing with 0:41:22.400 --> 0:41:25.880 the trajectory of of a human life, you know. Um. 0:41:27.080 --> 0:41:29.239 Part of it is perhaps comes down to just our 0:41:29.280 --> 0:41:32.279 ability to forecast the future, our ability to make long 0:41:32.480 --> 0:41:35.920 to engage in long term planning. Like we're as humans 0:41:35.920 --> 0:41:38.000 were generally not as good about that. We're certainly not 0:41:38.040 --> 0:41:40.960 good about planning beyond uh, you know, the scope of 0:41:41.000 --> 0:41:44.000 a human life. But but even like beyond the scope 0:41:44.040 --> 0:41:45.520 of a of a few years, we're better at the 0:41:45.960 --> 0:41:49.600 short term goals, and it's only with considerable effort that 0:41:49.680 --> 0:41:54.160 we we get better at considering long term goals. Um. 0:41:54.200 --> 0:41:55.840 So I think that's important to keep in mind. And 0:41:55.880 --> 0:41:58.239 all of this now, one thing that I think is 0:41:58.239 --> 0:42:01.200 also interesting in Miller's writings is that he talked he 0:42:01.440 --> 0:42:04.120 he talks a bit about over confidence, you know, as 0:42:04.120 --> 0:42:08.239 a symptom of underlying issues, you know, as opposed to 0:42:08.280 --> 0:42:13.680 being like an intrinsic quality. Uh. He writes, Unfortunately, configuration 0:42:13.760 --> 0:42:17.360 and synergy are usually attained at the cost of myopia. 0:42:17.840 --> 0:42:21.960 Stellar performers view the world through narrowing telescopes. One point 0:42:21.960 --> 0:42:25.759 of view takes over, one set of assumptions comes to dominate. 0:42:25.960 --> 0:42:30.319 The result is complacency and over confidence. And I think 0:42:30.360 --> 0:42:32.560 that plays into a lot of what what we've we 0:42:32.640 --> 0:42:35.040 spoke about earlier. You know. Sorry, I'm trying to make 0:42:35.080 --> 0:42:37.440 sense of it. Given the discuss the word synergy in it, 0:42:37.840 --> 0:42:40.280 I shouldn't know what that means. By now I've purged 0:42:40.320 --> 0:42:42.719 it from my brain. Oh okay, I see now, Yeah, 0:42:42.719 --> 0:42:45.080 I'm looking at the quote. Okay, So no, this is 0:42:45.160 --> 0:42:47.799 this is a very standard thing. Uh. You know, if 0:42:47.840 --> 0:42:52.480 you have successfully hammered several nails in everything and you've 0:42:52.480 --> 0:42:55.040 still got the hammer, everything really starts to look like 0:42:55.080 --> 0:42:59.120 a nail, just because like, if you've had success with 0:42:59.160 --> 0:43:02.399 the strategy and past, you don't switch. You just keep 0:43:02.480 --> 0:43:04.560 doing what you've done before, even if it doesn't make 0:43:04.600 --> 0:43:07.080 sense of that. Yeah, this is the this is what works, 0:43:07.080 --> 0:43:09.520 this is what our product is, and this is what 0:43:09.560 --> 0:43:12.439 we're going to stick to. Um and and then yeah, 0:43:12.440 --> 0:43:14.600 he talks a good bit about to do about over 0:43:14.640 --> 0:43:18.200 confidence as just a result of success, writing quote failure 0:43:18.239 --> 0:43:21.960 teaches leaders valuable lessons, but good results only reinforce their 0:43:22.000 --> 0:43:25.680 preconceptions and tether them more firmly to their tried and 0:43:25.760 --> 0:43:30.160 true recipes. Success also makes managers overconfident, more prone to 0:43:30.280 --> 0:43:33.400 excess and neglect, and more given to shape strategies to 0:43:33.440 --> 0:43:36.600 reflect their own preferences rather than those of the customers. 0:43:37.560 --> 0:43:40.680 And uh, you know. He also points to one of 0:43:40.680 --> 0:43:44.280 the key aspects of the icorous paradox being that overconfident, 0:43:44.360 --> 0:43:48.719 complacent executives extend the very factors that contributed to success 0:43:49.000 --> 0:43:52.239 to the point where they cause decline. So the thing 0:43:52.280 --> 0:43:55.800 that's working, you know, the button we're pushing that is 0:43:55.920 --> 0:43:58.560 leading to success, let's just really jam that sucker. You're 0:43:58.600 --> 0:44:01.120 like the rat in the experien that keeps pushing the 0:44:01.160 --> 0:44:04.959 cocaine button. Yeah. So he summarizes that there are really 0:44:04.960 --> 0:44:08.000 two aspects of the acreous paradox. One is the success 0:44:08.000 --> 0:44:10.719 can lead to failure via the fostering of overconfidence and 0:44:10.760 --> 0:44:13.640 other factors. And then to the aspects of a business 0:44:13.640 --> 0:44:16.840 that brings success can also hasten failure or quote, the 0:44:17.000 --> 0:44:20.520 very causes of success, when extended, may become the causes 0:44:20.560 --> 0:44:24.360 of failure. And as far as you know, ways to 0:44:24.480 --> 0:44:27.200 fight these transformations. Because that's when one question I had, 0:44:27.200 --> 0:44:29.640 It's like, is this just the trajectory? This is what happens? 0:44:29.719 --> 0:44:33.360 Like this is things can't just go up forever and 0:44:33.600 --> 0:44:38.480 a business cannot just exist, you know, indefinitely, like things 0:44:38.520 --> 0:44:41.920 have to die, right, I mean, these corporations are not 0:44:42.040 --> 0:44:45.919 like you mortals, but they are given to life and death. 0:44:45.960 --> 0:44:49.479 They're not eternal. Uh and and he says, he argues 0:44:49.520 --> 0:44:52.719 that there are ways to fight these transformations. He suggests 0:44:52.719 --> 0:44:56.799 self reflection and intelligence gathering that guards against excess, over 0:44:56.880 --> 0:45:00.960 confidence and irrelevance. And this, this I think matches up 0:45:00.960 --> 0:45:02.560 with what we've been talking about so far in the 0:45:02.560 --> 0:45:05.839 individual level, Like like, if you think you're you're gracious, 0:45:05.880 --> 0:45:08.919 like take a step back and and and uh and 0:45:08.920 --> 0:45:11.360 and think in the question whether you know you actually 0:45:11.400 --> 0:45:13.239 are to what extent you are? What else you could 0:45:13.239 --> 0:45:15.440 be doing to ensure that that that you were actually 0:45:15.480 --> 0:45:18.480 living up to your overestimation of self. If you think 0:45:18.520 --> 0:45:21.160 it's true about yourself, prove it, Prove it to you. Yeah, 0:45:21.160 --> 0:45:24.000 I have to say Miller is a is a is 0:45:24.040 --> 0:45:25.879 a really good writer about it this because normally I'm 0:45:25.920 --> 0:45:30.279 not interested in business culture type stuff like this, but 0:45:30.280 --> 0:45:31.840 but he does a great job of like tying it 0:45:31.880 --> 0:45:35.520 back into just the basic human scenario as well, Like 0:45:35.520 --> 0:45:38.920 like he points out that excellence in any human endeavor, 0:45:38.960 --> 0:45:41.319 be at arts or sports or what have you, you know, 0:45:41.360 --> 0:45:43.760 it tends to come at a price. We cannot excel 0:45:43.880 --> 0:45:46.960 at everything. We have to make sacrifices and choose what's 0:45:46.960 --> 0:45:49.719 important in the middle of the road, or a jack 0:45:49.760 --> 0:45:53.520 of all trades approach is not going to lead to greatness, 0:45:53.880 --> 0:45:56.319 you know, unless it's a story or some fable where 0:45:56.360 --> 0:46:02.239 greatness is just thrust upon somebody. You know, Uh, there's 0:46:02.280 --> 0:46:05.360 got to be some sort of trade off there. And 0:46:05.360 --> 0:46:07.080 he says it goes for the individual, but it also 0:46:07.120 --> 0:46:10.120 applies to companies as well. You can only sharpen your 0:46:10.120 --> 0:46:12.719 blade if you first realize that it is dull and 0:46:12.800 --> 0:46:15.359 must be sharpened. You know, like if if you if 0:46:15.400 --> 0:46:18.640 you believe yourself eternally and infinitely sharp, you're not going 0:46:18.719 --> 0:46:21.040 to do the sharpening right. And it's interesting to come 0:46:21.040 --> 0:46:23.120 back and think about the individual level and think about 0:46:23.120 --> 0:46:26.520 over confidence in this scenario, like one like basic trophy 0:46:26.560 --> 0:46:29.319 mentions is the idea of say, you know, the artist 0:46:29.400 --> 0:46:32.520 who neglects their family to focus on their art, or 0:46:32.520 --> 0:46:35.919 a business person that does the same thing. In those scenarios, 0:46:36.040 --> 0:46:39.560 might it be you know, I guess you know, maybe 0:46:39.560 --> 0:46:41.719 in a warped sensor in a way that that that 0:46:41.840 --> 0:46:45.319 caters to their their prime focus. Might it be beneficial 0:46:45.480 --> 0:46:47.360 to just think, oh, I'm a good dad, I'm a 0:46:47.360 --> 0:46:50.799 good husband, even when they're not. But it enables them 0:46:50.840 --> 0:46:53.400 to then put all of their more of their resources 0:46:53.400 --> 0:46:56.640 anyway into the pursuit of the thing that ultimately matters 0:46:56.680 --> 0:46:59.319 to them, like you know, card, hard cold cash, or 0:46:59.480 --> 0:47:03.160 the pursuit of art. Yeah. Well, so to be clear, 0:47:03.320 --> 0:47:06.520 obviously this wouldn't mean that it's actually useful in being 0:47:06.560 --> 0:47:09.000 a good person, have any good life, but it may 0:47:09.280 --> 0:47:13.080 very well be useful in focusing on whatever it is 0:47:13.160 --> 0:47:16.319 that really matters to you, to be overconfident about your 0:47:16.440 --> 0:47:20.080 your crappy efforts in other areas of life. Yeah, I 0:47:20.360 --> 0:47:23.160 think that's entirely true. So it's it's Yeah, it's interesting 0:47:23.200 --> 0:47:25.600 to compare the two, the corporate version of this in 0:47:25.640 --> 0:47:27.879 the individual version of this. And certainly if you want 0:47:27.880 --> 0:47:31.040 to read more about this idea of the acreous paradox, 0:47:31.920 --> 0:47:34.759 I certainly recommend checking out more of his writings. So 0:47:34.800 --> 0:47:37.520 we have all these economic metaphors, like you know from 0:47:37.520 --> 0:47:40.360 Adam Smith, the Invisible Hand and whatever, I feel like 0:47:40.400 --> 0:47:43.920 we need an economic metaphor of the nemesis, Like the 0:47:43.960 --> 0:47:47.440 Nemesis that is this force in the market that swoops 0:47:47.440 --> 0:47:51.880 into punish hubrist and over confidence in business. Yeah, sometimes 0:47:51.880 --> 0:47:56.359 it seems like Nemesis is a little a little uh 0:47:57.040 --> 0:47:59.120 resistant to doing that. I don't know, I mean, part 0:47:59.120 --> 0:48:01.040 of it comes down again to the fact that that 0:48:01.520 --> 0:48:06.279 businesses and corporations are are are less mortal. Well, yeah, 0:48:06.280 --> 0:48:08.880 I mean it is funny that, uh, we've discussed a 0:48:08.920 --> 0:48:11.840 lot of these episodes how overconfidence can both lead to 0:48:12.040 --> 0:48:15.960 disaster and and negative outcomes, but can also in some 0:48:16.000 --> 0:48:20.280 cases be highly rewarded and be very lucrative. Yeah. Yeah, 0:48:21.040 --> 0:48:25.200 you know, I'm also remind talking about, you know, curbing 0:48:25.360 --> 0:48:28.680 overconfidence or the perception of overconfidence by making statements that 0:48:28.760 --> 0:48:31.719 cannot be put to the test. You of course see 0:48:31.719 --> 0:48:34.120 that a lot in the business world. You know that 0:48:34.440 --> 0:48:37.360 if you're saying you're the best car dealership in the galaxy, 0:48:38.040 --> 0:48:39.839 you know that you can get away with saying you're 0:48:39.880 --> 0:48:43.560 the best car dealership in town. Well, then people can say, well, 0:48:43.640 --> 0:48:45.960 let's see your sales numbers, let's compare you to gems 0:48:46.000 --> 0:48:48.080 across town. No, even that would be easier to get 0:48:48.080 --> 0:48:49.560 away with, Like the one that would be hard to 0:48:49.560 --> 0:48:51.720 get away with is saying like we have the lowest 0:48:51.800 --> 0:48:54.600 prices in town or something like that. Then you're like, 0:48:55.000 --> 0:48:57.640 then you're stuck either that's true or that's not right. 0:48:58.400 --> 0:49:00.520 But then again, on a personal the first all level, 0:49:00.560 --> 0:49:02.600 you know, you can have your mug that says world's 0:49:02.640 --> 0:49:05.680 Greatest dad and nobody's gonna call you on that. What 0:49:05.800 --> 0:49:09.759 you can get out your dad ruler and measure me. Yeah, 0:49:09.840 --> 0:49:12.319 all right, So I think we've we've reached the end 0:49:12.360 --> 0:49:16.120 of our discussion here for the week on overconfidence, but 0:49:16.200 --> 0:49:18.640 clearly there's a there's a lot of material here. It'll 0:49:18.680 --> 0:49:21.200 be interesting to hear back from listeners because I think 0:49:21.200 --> 0:49:23.040 we all have some perspective on this. We all have 0:49:23.120 --> 0:49:27.719 experience with with over confidence in others or certainly in 0:49:27.880 --> 0:49:31.600 over confidence in ourselves or the management of overconfidence in ourselves, 0:49:31.920 --> 0:49:34.160 and so we we'd love to hear everyone's thoughts on this. 0:49:34.880 --> 0:49:36.400 In the meantime, if you want to check out other 0:49:36.440 --> 0:49:38.680 episodes of Stuff to Blow your Mind, you can find 0:49:38.719 --> 0:49:41.640 them wherever you find your podcasts. 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