Speaker 1: Welcome to Stuff to Blow Your Mind, a production of
Speaker 1: I Heart Radios How Stuff Works. Hey, you, welcome to
Speaker 1: Stuff to Blow Your Mind. My name is Robert Lamb
Speaker 1: and I'm Joe McCormick, and we're back with part two
Speaker 1: of our discussion of overconfidence. That's right. If you did
Speaker 1: not listen to the previous episode, do go back and
Speaker 1: listen to that episode, because we're gonna lay the ground work.
Speaker 1: We're going to discuss over confidence and hubrists and mythology
Speaker 1: in human histories, and then get into the psychology of
Speaker 1: it and what various psychological studies have revealed and continue
Speaker 1: to reveal about the nature of over confidence and how
Speaker 1: we can divide this sort of amorphous concept of over
Speaker 1: confidence out into categories that can be more easily studied
Speaker 1: and understood. That's right now. In the last episode, one
Speaker 1: of the main things we talked about was this huge
Speaker 1: new review of the scientific literature on something known as
Speaker 1: the better than average effect, which is the tendency for
Speaker 1: people to rate themselves as better than average with respect
Speaker 1: to their peers on all kinds of stuff. One classic
Speaker 1: example is that something like ninety three percent of people
Speaker 1: think they're a better than average driver. So if you're
Speaker 1: if you're listening to this as you drive, eyes back
Speaker 1: on the road, and make sure you use this turn signals.
Speaker 1: Turn signals, save lives, turn signals. Let other drivers and
Speaker 1: pedestrians know what you intend to do. Even if you
Speaker 1: think you're a great driver, drive like you're less good
Speaker 1: than you are, and it will make you a better driver.
Speaker 1: Drive like you can't see all the other cars and
Speaker 1: pedestrians around you, because sometimes you cannot drive like you're
Speaker 1: driving a murder weapon, because potentially you are. It's quite true,
Speaker 1: all right. Now. One of the things we talked about
Speaker 1: in the last episode was a paper from seventeen by
Speaker 1: Don Amore and Derek Schatz called the Three Faces of Overconfidence,
Speaker 1: which which actually broke over confidence down into three distinct
Speaker 1: categories of of bias or misperception and uh. And we
Speaker 1: we talked about those a little bit last time. We're
Speaker 1: going to be exploring more of what that paper had
Speaker 1: to say, and it's critiques of overconfidence research, specifically with
Speaker 1: reference to these three types of overconfidence. And as a
Speaker 1: brief refresher, the three types are overestimation, overplacement, and over precision.
Speaker 1: Overestimation is thinking that you're better than you are, and
Speaker 1: this would be with reference to some kind of uh,
Speaker 1: you know, objective measure out in the world. So if
Speaker 1: you think that you are taller than you are, you know,
Speaker 1: if you think that you can jump higher than you can,
Speaker 1: if you think that you would get a better score
Speaker 1: on a test than you actually could, that's overestimation. The
Speaker 1: next one, overplacement, is similar, but instead it's comparing yourself
Speaker 1: with other people. So the better than average effect would
Speaker 1: be an example of overplacement. It's, you know, thinking you
Speaker 1: are better than average compared to your peers at some task.
Speaker 1: Or it would be thinking that you know that you
Speaker 1: work harder than other people, or thinking that you are
Speaker 1: smarter than other people. Of course, with the if, it's
Speaker 1: over confidence, meaning that those are not actually accurate assessments.
Speaker 1: And then finally the other one would be over precision,
Speaker 1: which is being too sure that you know the truth. Again,
Speaker 1: this this might be called epistemic over confidence. It's just
Speaker 1: being too certain that your beliefs are correct. Now, to
Speaker 1: get into more in chats is paper from. One of
Speaker 1: the questions that they address is what actually drives some
Speaker 1: of these different effects as as they are manifested so
Speaker 1: they start with overestimation. What causes us to say think
Speaker 1: we would get a better score on a test than
Speaker 1: we do, or to think we have more money in
Speaker 1: the bank than we do. A common answer that people
Speaker 1: give to this is the idea of wishful thinking. It
Speaker 1: would feel good if this were true, therefore I believe it. Right. Uh.
Speaker 1: The authors don't think that this explanation is very plausible,
Speaker 1: and they offer several problems with it, and we can
Speaker 1: interrogate these, maybe disagree with them as we go on.
Speaker 1: But first of all, they say, you know, self delusion
Speaker 1: is demonstrably maladaptive. For example, a tendency toward wishful thinking
Speaker 1: about the safety of kissing sharks so with tongue is
Speaker 1: not a trait that the environment will tend to select for.
Speaker 1: People overconfident about their academic abilities will tend not to
Speaker 1: study and actually do worse. People who believe themselves invulnerable
Speaker 1: will take risks that sometimes get them killed. This might
Speaker 1: seem obvious, but there is actually plenty of research on this.
Speaker 1: I mean, people who are overconfident about their abilities do
Speaker 1: face a lot of downsides when those abilities are put
Speaker 1: to the test. Yeah, I mean, one example from literature
Speaker 1: that comes to mind is that of Macbeth, who believes
Speaker 1: himself protected by prophecy um and then of course uh
Speaker 1: snuffs it because yeah, exactly. But then again, I think, okay,
Speaker 1: so it is true that these people will face a
Speaker 1: lot of downside, But then again, people do engage in
Speaker 1: self destructive, self deluded behavior all the time. I mean,
Speaker 1: this is a common feature of human life. Yeah we
Speaker 1: I mean, for instance, we were just recently talking about
Speaker 1: the Placebo effect on our movie episode where we talked
Speaker 1: about the fly and and about the possibility that the
Speaker 1: Polacebo effect is basically due to uh, you know, this
Speaker 1: innate tendency towards self delusion that may very well be adaptive.
Speaker 1: And at least in this scenario, um, where yeah, we
Speaker 1: we benefit from being able to believe something is going
Speaker 1: to work and and uh and and and experiencing at
Speaker 1: least a small physical benefit from it, like a small
Speaker 1: curative benefit from it. And then um, you know, I
Speaker 1: also can't help but think that, you know, self delusion
Speaker 1: entails far more than just over confidence. It also entails
Speaker 1: all manner of paranoia. And there is a strong case
Speaker 1: for the adaptive nature of say making a type one
Speaker 1: error in cognition, a false positive, the belief that the
Speaker 1: rustle in the tall grass is that of a tiger
Speaker 1: when it's not, because if you make the type two
Speaker 1: uh or, you're more likely to be eaten by the tiger. Right, right, Yeah,
Speaker 1: having accurate information about the world is actually very useful,
Speaker 1: and having inaccurate information can kill you. Yeah, but but
Speaker 1: I'm not so much you know, trying to to disagree
Speaker 1: with the maladaptive self delusion argument that we mentioned earlier,
Speaker 1: but but rather you know, to point out that the
Speaker 1: human experiences is rife with self delusions. So might a
Speaker 1: dash of overconfidence, even in the form of overestimation, served
Speaker 1: to balance outh this alchemy of you know, of our
Speaker 1: perception of reality. For example, so you have a karaoke singer,
Speaker 1: and granted karaoke is very low stakes, but you could
Speaker 1: involve social embarrassment, which you could fear would lead to ostracism,
Speaker 1: and that's actually one of the most powerful negative motivators
Speaker 1: on human behavior. Right, But again, at karaoke is also
Speaker 1: one of these things where like sometimes it's cool to
Speaker 1: do it badly. So this is not a perfect example,
Speaker 1: but so you have a kara karaoke singer that imbibes
Speaker 1: in a little liquid courage before taking the microphone, as
Speaker 1: most karaoke participants are are are wont to do. Uh,
Speaker 1: but yeah, they get a little liquid courage because they
Speaker 1: know they don't have the greatest voice in the world.
Speaker 1: And then they feel a little awkward getting up there.
Speaker 1: But but they know that a little bit of booze
Speaker 1: induced over confidence might help matters. I think you're exactly
Speaker 1: right there, and this this is funny to start here
Speaker 1: because I think while the authors make tons of good points,
Speaker 1: this is one of the ones they make that I
Speaker 1: might disagree with the most. I think that there are
Speaker 1: antagonistic adaptations in human behavior. One pressure might favor having
Speaker 1: an accurate picture of the world, assessing things in a
Speaker 1: clear and accurate way, while a cross pressure favor self deception,
Speaker 1: especially self deception in the form of over confidence. For example,
Speaker 1: you might be more likely to survive if you have
Speaker 1: accurate assessments of your own abilities, but you might be
Speaker 1: more likely to take big risks with potentially big rewards
Speaker 1: if you overestimate your abilities or self delusional. Over Confidence
Speaker 1: could be adaptive because it helps us persuade or even
Speaker 1: deceive other people about our worth. Yeah, Ultimately you have
Speaker 1: to you have to believe in yourself if you know
Speaker 1: other people are not going to believe in you for you,
Speaker 1: right right. I mean, we we talked in the last
Speaker 1: episode about how it's probably not a coincidence that you
Speaker 1: really often notice over confidence in people who occupy high
Speaker 1: status leadership roles. How they get there. I mean, it's
Speaker 1: not hard to imagine the overconfidence helped them get to
Speaker 1: that point. Yeah, and it's, uh, sometimes it's a fun,
Speaker 1: sometimes terrifying exercise to like if you if you engage
Speaker 1: with people like this and then when you realize, oh,
Speaker 1: they're just really overconfident, they don't they're they're not to
Speaker 1: say they're not skilled, but when you realize they're not.
Speaker 1: Sometimes they're not. But sometimes you really you realize, oh,
Speaker 1: there there is this gap between ability and uh and
Speaker 1: and and what they're they're saying they're going to deliver
Speaker 1: on or what they are estimating the future will consist of. Yeah,
Speaker 1: I mean, I it is kind of shocking how often
Speaker 1: in life you will suddenly come to a realization that
Speaker 1: you know, the boss or the leader or whatever's main
Speaker 1: skill is b essing, like that they can just go
Speaker 1: out there and wing it in a way that you
Speaker 1: would be too timid and reserve to do. Right now,
Speaker 1: this idea of you know, accurate assessments playing into our
Speaker 1: our own abilities, I couldn't help but think of the
Speaker 1: film Butch Casting and the Sun Dance Kid in this scenario,
Speaker 1: because it really as it relates to two specific points
Speaker 1: in the film. One is the whole would you make
Speaker 1: that jump if you didn't have to scenario where they're
Speaker 1: being tracked, they're being hunted, and they've come to this, uh,
Speaker 1: this this cliff overlooking this river, and they realize that
Speaker 1: if they jump, if they jump off this cliff and
Speaker 1: they land in that river and they don't die, they'll
Speaker 1: get away because the stakes are such that those pursuing
Speaker 1: them will not follow them, they will not make that
Speaker 1: jump if they don't need to. Um. So, so so
Speaker 1: there's there's that, and then at the very end there's
Speaker 1: kind of a going out the old fashioned way guns
Speaker 1: ablazing scenario where they're cornered, they're going to slowly be
Speaker 1: killed and they decided to just go for it, to
Speaker 1: just bust out shooting and just fight. Right. So, so
Speaker 1: the incentives, like the evolutionary incentives on a brain generating
Speaker 1: accurate pictures of the world versus self deluded over confidence.
Speaker 1: Those could very well be just the contrast between a
Speaker 1: low risk, low reward strategy versus a high risk, high
Speaker 1: reward strateke right, Yeah, so yeah, the first example definitely
Speaker 1: high risk, high reward. Like it was pretty much their only,
Speaker 1: their best option for survival at that point, and they
Speaker 1: took it, and in the film they survive. At the
Speaker 1: end of the film, it's pretty much implied that they die.
Speaker 1: But but at the same time, it's it still seems
Speaker 1: to be their best option, if not their best option
Speaker 1: for surviving. It's kind of at least a like the
Speaker 1: psychological best option. You know, are we gonna stay in
Speaker 1: here and die like rats, or are we gonna you know,
Speaker 1: just burst out there and you know, die like heroes
Speaker 1: in a film that is named after them. You know, man,
Speaker 1: that's a great movie. I want to go back and
Speaker 1: why I haven't seen the Garsh remember, except the end,
Speaker 1: I mean, the ending is kind of a downer, but uh,
Speaker 1: but yeah, it's it's it's surprisingly sweet for for a
Speaker 1: violent outlaw movie. Yeah, it's a good one. And you know,
Speaker 1: I mentioned Macbeth earlier in the whole idea of you know,
Speaker 1: draping himself in prophecy and using that to to to
Speaker 1: to pump himself up. But that doesn't bring up bring
Speaker 1: to mind the role of religion and all of this,
Speaker 1: you know, I mean certainly a lot of the things
Speaker 1: that religion can do to your estimation of ability or
Speaker 1: you know, uh, you know, it can revolve around you know,
Speaker 1: the survivability of the soul for example, you know, and
Speaker 1: like what will happen if I act a certain way
Speaker 1: in life? Yeah, and I think there could possibly be
Speaker 1: cross pressure is going the same way with that. I
Speaker 1: mean that that there are some evolutionary drawbacks and some
Speaker 1: some advantages to it, right. And then of course that's
Speaker 1: not to say that religious motivations, uh, you know exist
Speaker 1: free of social of course, I guess you know, there's
Speaker 1: going to be a rich interplay between those, and that's
Speaker 1: you know, that's something that comes up, for instance, in
Speaker 1: um when you look at studies of say, suicide bombers,
Speaker 1: you know, where on one hand, you can look at
Speaker 1: it and just go with the simple scenario of oh,
Speaker 1: here's a person who believes that if they die doing
Speaker 1: this act, then they'll be rewarded in the afterlife. But
Speaker 1: then behind that there's a whole social scenario as well
Speaker 1: of other humans, you know, telling them that this is
Speaker 1: the thing to do, et cetera. Yeah, motivations are are
Speaker 1: a rich stew of many different influences. I mean, it's
Speaker 1: usually hard to nail down a single inciting incident or
Speaker 1: cause that lead people down a path in life. And
Speaker 1: in fact, I think a lot of times even when
Speaker 1: people do that with themselves and say this was the
Speaker 1: reason I became or whatever I did, whatever, I think
Speaker 1: a lot of times they're over some they're they're wrong
Speaker 1: about themselves. Yeah, so basically self delusion, we're all just
Speaker 1: houses of cards, just ready to be knocked down at
Speaker 1: any point. Well, but there's another way of putting it. Now.
Speaker 1: One thing you and I could be getting wrong here
Speaker 1: is if we're talking properly about self delusion or some
Speaker 1: other type of of bias or like misperception in the brain.
Speaker 1: Because the authors here they're saying, okay, self delusion specifically,
Speaker 1: maybe self delusion implies that there's there's a sort of
Speaker 1: transformation going on somewhere in the brain, Like the brain
Speaker 1: gets accurate information about the world and then just somehow
Speaker 1: presents it to the conscious mind in a skewed way.
Speaker 1: The authors share think that, especially if you're talking about
Speaker 1: wishful thinking, is the brand of self delusion, uh, you know,
Speaker 1: getting false perceptions about the world in order to feel better.
Speaker 1: They think that doesn't really work from a like unconscious
Speaker 1: mind to conscious mind model, because emotions and moods also
Speaker 1: seem to emerge from the unconscious mind, not from the
Speaker 1: conscious mind. But then there's another thing they go to,
Speaker 1: which is that they argue the empirical evidence for true
Speaker 1: self deception in overestimation it's actually kind of weak and
Speaker 1: kind of mixed. Why would this be Well, first of all,
Speaker 1: they say, it's hard to separate true self deception from
Speaker 1: attempts to deceive others, including the researchers. So how can
Speaker 1: you tell when somebody truly overestimates their own traits or
Speaker 1: abilities versus they just tell you that they think their
Speaker 1: traits or abilities are better than they are. In a
Speaker 1: lot of cases, both would manifest equally as outward over confidence. Now,
Speaker 1: you can come up with some methodologies and some tests
Speaker 1: to try to get around this, Like you can make
Speaker 1: people bet sums of money that would where the outcome
Speaker 1: of the bet would be dependent on how good they
Speaker 1: actually are at a task or something. But in a
Speaker 1: lot of cases, they say, it's hard to tell the
Speaker 1: difference between true self deception and just attempts to deceive
Speaker 1: other people. Another thing they point out is that you
Speaker 1: don't actually have to be deceiving yourself to overestimate your abilities.
Speaker 1: You could be genuinely completely ignorant of the fact that
Speaker 1: you're not as good as you think you are. Uh.
Speaker 1: And here's in place that the famous Dunning Krueger effect
Speaker 1: comes in. Now, you may have heard about the Dunning
Speaker 1: Krueger effect, but very short sketch on it. Of course,
Speaker 1: overlaps with a lot of what we're talking about today.
Speaker 1: Participants less skilled in a task or subject area can
Speaker 1: be prone to show even greater overestimation of their abilities
Speaker 1: in that skill or subject area. So with some skills,
Speaker 1: the worst you are, the more you overestimate your awesomeness. Now,
Speaker 1: why why on earth would this be? Well, the authors
Speaker 1: here mentioned this could just simply come from your low
Speaker 1: skills providing you with a poor frame of reference. You
Speaker 1: don't know enough about this task or skill or subject
Speaker 1: area to even understand how much you don't know, so
Speaker 1: like the Dunning Krueger effect would show not self deception
Speaker 1: but genuine ignorance. You lack enough information to understand how
Speaker 1: bad you're failing. Like I think a good example of
Speaker 1: this is you know, you read you you read one
Speaker 1: theory about some phenomena and uh, and it can be
Speaker 1: rather convincing. It can be so convincing that you think, well,
Speaker 1: this is it. They made a great case. But if
Speaker 1: you don't, if if you don't actually look at some
Speaker 1: of the other theories out there or look at uh,
Speaker 1: you know, some sort of if you look at writings
Speaker 1: or or or pieces that actually compare them, or do
Speaker 1: some sort of meta analysis, then you don't really have
Speaker 1: a proper frame of reference or even like sort of
Speaker 1: I wouldn't even say like nothing like a perfect frame
Speaker 1: of reference, but even say like a healthy frame of reference. Yes,
Speaker 1: you can go so like you read one article about
Speaker 1: a subject and then you're an expert, and then you
Speaker 1: start reading more and you realize like, oh wait a minute,
Speaker 1: you know there's so much I don't understand that your
Speaker 1: estimation of your own expertise drops sharply after Yeah, you
Speaker 1: like you might realize, oh, well, there are other theories,
Speaker 1: or you might realize, oh, well, this was just one
Speaker 1: person's summary of this particular theory, and oh and then
Speaker 1: on top of that, perhaps they had a particular acts
Speaker 1: to grind in writing it, etcetera. Yeah, that's a great example.
Speaker 1: I mean not to say that you should doubt every
Speaker 1: you read, but I mean, yeah, you should have. You
Speaker 1: should you should have healthy doubt, not you know, not
Speaker 1: denial ism, but but you know, just be aware that
Speaker 1: you don't know everything, and you should be especially suspicious
Speaker 1: when you have dipped your toes into a subject and
Speaker 1: now feel that you fully understand it. And we say
Speaker 1: that as a professional toe dippers. Uh. Now, finally, they
Speaker 1: point out that the empirical evidence for wishful thinking itself
Speaker 1: in general as a psychological phenomenon. They say, this is
Speaker 1: not actually strong. Uh. If if there were strong evidence
Speaker 1: for wishful thinking, wouldn't it be the case that more
Speaker 1: desirable outcomes would be more strongly believed? And they say, no,
Speaker 1: studies that try to test this out do not find
Speaker 1: this to be the case. It's not the case that
Speaker 1: the more you want something, the more you believe it
Speaker 1: to be true. And there are only a few types
Speaker 1: of scenarios where there's any evidence of this at all,
Speaker 1: such as scenarios where all outcomes are equally likely, like
Speaker 1: a dice roll or something. Now that is interesting to
Speaker 1: think of in terms of dungeons and dragons, were frequently
Speaker 1: one is either making an attack or doing some sort
Speaker 1: of attempting, some sort of act that requires a skill check.
Speaker 1: And I find myself doing this. You'll you go up
Speaker 1: there and you begin to explain what your character is
Speaker 1: going to do, as if you hit that natural twenty
Speaker 1: that's kind of the Yeah, So I find myself engaging
Speaker 1: in a lot of that level of overconfidence with my
Speaker 1: character because ultimately it all comes down to the roll
Speaker 1: of the dice. You know, unless I'm trying to you know,
Speaker 1: leap off of the democ organ's head or something, that
Speaker 1: is going to be extremely difficult because they're going to
Speaker 1: be additional numerical you know values, uh, you know, addages
Speaker 1: attracted from the attempt. You know, ultimately it's still gonna
Speaker 1: be one to twenty one being uh, you know, a
Speaker 1: pretty much complete fail. Uh. You know that's gonna be
Speaker 1: the one where you slip and stab yourself with your
Speaker 1: own sword, or it's gonna be that natural twenty, which
Speaker 1: is going to be you know, the wonder hit where
Speaker 1: you do extra damage. That is fantastic example. I I
Speaker 1: was trying to think of cases where I thought I
Speaker 1: really did engage in wishful thinking, and I couldn't think.
Speaker 1: I'm sure I do sometimes. But yeah, they say it's
Speaker 1: not actually as common as people think it is. And
Speaker 1: here's maybe one case. Yeah, I think in Dungeons and Dragons,
Speaker 1: I have yet to meet a player or be a
Speaker 1: player that does not engage in will wishfull thinking. Every
Speaker 1: time you roll the dice, like nobody nobody rolls that
Speaker 1: dice and it says, all right, this is how I'm
Speaker 1: going to fall off this table or this is how
Speaker 1: I'm going to fall into the next trap, and uh,
Speaker 1: and you know, and skewer myself on a stake. No,
Speaker 1: we want the best outcome and we we have it
Speaker 1: in our mind before the dice puts us in our place. Now,
Speaker 1: another thing that the authors here bring up is that
Speaker 1: overestimation itself. Remember again, that's just thinking that you are
Speaker 1: better than you are in some way in terms of
Speaker 1: abilities or traits or something. Um that this actually has
Speaker 1: a mixed evidential record. It's not always the case that
Speaker 1: we overestimate ourselves on all quality, easier tasks. It's more
Speaker 1: the case for some things in particular, And they give
Speaker 1: a couple of examples of things where there really is
Speaker 1: a ton of evidence for consistent overestimation. One is something
Speaker 1: you brought up in the last episode, Robert, the planning fallacy.
Speaker 1: There is really good evidence that people consistently overestimate how
Speaker 1: fast they'll be able to get things done or complete
Speaker 1: a project of some kind. And this is especially true
Speaker 1: if the project is difficult and novel. So like, if
Speaker 1: I try to, you know, I put together some complex
Speaker 1: thing for you to do that's hard and you've never
Speaker 1: done it before, you are really likely to massively underestimate
Speaker 1: how much time it's going to take you. Right if
Speaker 1: you're like, well, you know, I'm not a handyman, but
Speaker 1: I think I'm gonna install this sink myself, and then
Speaker 1: you watch a weekend just vanish. Yeah, I know that feeling.
Speaker 1: Another one that they cite is the illusion of control.
Speaker 1: People pretty consistently overestimate how much control they were they
Speaker 1: will have over future. It comes even things that that
Speaker 1: they should understand are basically random. Right, you see this
Speaker 1: financially in business wise. A lot of times where someone
Speaker 1: will have they think they have a clear idea of
Speaker 1: like how things are going to flow, but they're they're
Speaker 1: just not taking into account all the factors they cannot control,
Speaker 1: and say the economy or you know, or or or
Speaker 1: just the industry that they're a part of. But they're
Speaker 1: kind of they're acting, they're making choices based on sort
Speaker 1: of like a not even a best case scenario, but
Speaker 1: sort of like a standard scenario. You know, Yeah, I
Speaker 1: think I know what you mean. Like they're they're not
Speaker 1: counting on the storm, and they're also not counting on
Speaker 1: the wind to completely die away, and that's how they're basing,
Speaker 1: you know, their their estimate of how long it's going
Speaker 1: to take to sail across the sea. Oh yeah, I
Speaker 1: mean that that's another thing, like we there's actually a
Speaker 1: name for this. I've forgotten it at the moment. Maybe
Speaker 1: I'll call it to mind in a second. But it's
Speaker 1: the the assumption that the future will be like the present. Yeah,
Speaker 1: maybe it's called the continuation fallaci ores thing um. But
Speaker 1: now there's one more thing that they bring up with
Speaker 1: respect to overestimation, specifically, uh and This is a standard
Speaker 1: finding that applies to a lot of the research on overestimation.
Speaker 1: It's called the hard easy distinction or the hard easy effect.
Speaker 1: And uh that this one is interesting because we'll see
Speaker 1: some variations with it in other types of overconfidence. But
Speaker 1: it goes like this, we are more likely to overestimate
Speaker 1: our abilities on hard tasks and underestimate our abilities on
Speaker 1: easy ones. So again, like the hard project comes up
Speaker 1: with the planning fallacy, you massively underestimate how much time
Speaker 1: it's going to take you to do that hard, complex,
Speaker 1: novel thing, but then you might overestimate how much time
Speaker 1: it's going to take you to do something that's a
Speaker 1: common easy task. I guess that the main example that's
Speaker 1: coming to mind on this one would be the scenario
Speaker 1: where driving across town, are going to a particular destination
Speaker 1: takes less time than you think it will, and then
Speaker 1: you show up like fifteen minutes early or were worse. Yeah,
Speaker 1: and the authors here have some explanations for how exactly
Speaker 1: this is working that we'll get to in a bit.
Speaker 1: Should we take a break, Yes, we should, and when
Speaker 1: we come back we will continue our journey through over confidence.
Speaker 1: Thank alright, we're back all right, So we've been talking
Speaker 1: about this paper about over confidence, about the three types
Speaker 1: of overconfidence by shots and more. We were just talking
Speaker 1: about overestimation, the belief that you're better than you are,
Speaker 1: especially with respect to some kind of objective measure or
Speaker 1: independent measure. And so we want to move on to
Speaker 1: the next type of overconfidence they talk about, which is overplacement.
Speaker 1: And again this is different from overestimation because this is
Speaker 1: thinking that you're better than you are with respect to
Speaker 1: other people and judging yourself compared to others. Now, the
Speaker 1: authors have some methodological critiques of some of the literature here,
Speaker 1: but they acknowledge there's a lot of evidence for overplacement,
Speaker 1: citing the better than average effect in all its beastly forms,
Speaker 1: like in the other paper that we talked about that was,
Speaker 1: you know, recently found to be extremely robust. Uh. They've
Speaker 1: got some quibbles about methodology and some of these studies,
Speaker 1: like using ambiguous scales or measures. Robert, you were talking
Speaker 1: I think in the last episode about you know how
Speaker 1: some of these types of things like uh, you know,
Speaker 1: how people rate themselves in terms of attractiveness or intelligence
Speaker 1: or something. These can of course suffer from ambiguous criteria,
Speaker 1: right yeah, or sometimes just straight up unfair criteria, racist criteria, UM,
Speaker 1: misogynistic criteria, etcetera. Well, yeah, it absolutely has all those
Speaker 1: negative effects. I mean, I think overplacement is like it's
Speaker 1: behind a lot of the worst types of prejudices that
Speaker 1: make themselves known. But even if you're just like looking
Speaker 1: at what is the quality you're trying to measure, you know,
Speaker 1: attractiveness or something like that, that there's usually not like
Speaker 1: a way of rating that is, it's all based on
Speaker 1: these kind of ambiguous subjective judgments. One great example of
Speaker 1: this is something that we've brought up several times already,
Speaker 1: like the driving example. So Svinson in one did a
Speaker 1: study where he discovered that nine percent of American drivers
Speaker 1: rated themselves above the median and driving ability. Obviously, whatever
Speaker 1: criterion you use, it's impossible for to be above the media,
Speaker 1: and it would have to be you know, like, um,
Speaker 1: the majority can be above average, but the majority cannot
Speaker 1: be above the median. And the authors point out this
Speaker 1: would be more impressive if it were more specific, because
Speaker 1: due to this problem with like ambiguous scales or measures,
Speaker 1: anybody could technically have their own definition of what makes
Speaker 1: a good driver, So you could be answering that, thinking like, well,
Speaker 1: there are things that I do well when I drive,
Speaker 1: and maybe they're different from what somebody else thinks that
Speaker 1: they do well when they drive, and that's their criterion, right,
Speaker 1: I mean, your your definition of being a good driver
Speaker 1: could just be I did not you know, I wasn't
Speaker 1: in a wreck on the way to work this morning,
Speaker 1: you know, Or or it could be I get the
Speaker 1: places I need to go fast like in those those
Speaker 1: are definitely, you know, not necessarily the same vision of
Speaker 1: good driving. Or I look really cool when I do it,
Speaker 1: you know. Uh. There's another thing they bring up which
Speaker 1: is interesting, which is the role of self selection in
Speaker 1: increasing the apparent prevalence of over confidence in the real world.
Speaker 1: So an example would be like this, On average, more
Speaker 1: overconfident people are likely to apply for jobs just sort
Speaker 1: of by definition, right, more overconfident people are likely to
Speaker 1: start businesses, to run for office, So we're we're exposed
Speaker 1: to more of these people, and this could lead to
Speaker 1: us thinking that their confidence level is more represented in
Speaker 1: the general population than it actually is. Oh yeah, you
Speaker 1: turn on the television. It's what it's almost exclusively overly
Speaker 1: confident people, that's true. Yeah, So if you just look
Speaker 1: at like business leadership, politics, celebrities, all this, you're gonna see.
Speaker 1: I think you will see in general way more over
Speaker 1: confidence than just will talking to your friends and relatives
Speaker 1: and co workers. Now here's a really interesting thing. Remember
Speaker 1: we talked about the hard easy effect or the easy
Speaker 1: heart effect with overestimation, where people tend to overestimate their
Speaker 1: abilities on hard jobs and underestimate their abilities on easy jobs. Apparently,
Speaker 1: for overplacement, it's there's also an easy heart effect, but
Speaker 1: it's in the exact opposite direction. With overplacement, you overplace
Speaker 1: yourselves relative. We overplace ourselves relative to others on easy,
Speaker 1: common tasks and underplace ourselves relative to others on difficult, unusual,
Speaker 1: or rare ones. So again, what would be some examples
Speaker 1: of this? Uh, you think you're in the ninety percentile
Speaker 1: of drivers, but really you're in the forty. This is
Speaker 1: an easy common task. On the other hand, people think
Speaker 1: that they are less likely than others to win difficult competitions. Uh.
Speaker 1: Studies show that when there's a teacher that decides to
Speaker 1: make an exam harder and graded on a curve, students
Speaker 1: expect their grades to be worse than others, even when
Speaker 1: there's common knowledge that there will be a curve. So
Speaker 1: as the test gets harder, students perceived that they will
Speaker 1: do worse relative to other classmates. That's kind of interesting. Uh.
Speaker 1: They point out that people believe they are worse jugglers
Speaker 1: than other people. They believe that they are less likely
Speaker 1: to win the lottery than other people. Again a difficult,
Speaker 1: rare thing, uh, And that they here's here's a very
Speaker 1: interesting version. Just in terms of ages. People believe they
Speaker 1: are less likely than other people to live past one hundred,
Speaker 1: but they also think they're more likely than other people
Speaker 1: to live past seventy. Interesting. Well, of course, both of
Speaker 1: those kind of depends on where you are in the
Speaker 1: age spectrum when you're making that estimation, you know, because
Speaker 1: you could be I mean, I mean, but apparently it's
Speaker 1: true of all age, but also your quality of life, right,
Speaker 1: I mean, for some people that prospect of living two hundred,
Speaker 1: Depending on where you are health wise, that might be terrifying.
Speaker 1: That might be it might be wishful thinking that you'll
Speaker 1: expire sooner than that, uh, or it could be the
Speaker 1: other way around, you know. Um, what kind of explanations
Speaker 1: are they They throwing out, Yeah, this was interesting, So yeah,
Speaker 1: why do we fail in opposite directions here? Depending on
Speaker 1: whether we're imagining our performance against objective measures versus relative
Speaker 1: to others, and the author's site solutions from some of
Speaker 1: Moore's previously previous work with other authors, they write this quote.
Speaker 1: If people make any errors estimating how well they've done
Speaker 1: or will do, then it stands to reason they're more
Speaker 1: likely to overestimate a low score and the more likely
Speaker 1: to underestimate a high score. That's the herd easy effect.
Speaker 1: As long as people have more uncertainty about others scores,
Speaker 1: they'll tend to make even more regressive estimates of others
Speaker 1: than of self. The consequence would be that they overestimate
Speaker 1: others even more than themselves on difficult tasks and come
Speaker 1: to believe that they are worse than others. The oppos
Speaker 1: that would hold true for easy tasks. People would underestimate
Speaker 1: others more than themselves and wind up believing that they
Speaker 1: are better than others. So that took me a minute
Speaker 1: to get my head around, but then I finally made
Speaker 1: sense of it. So when you're not sure how you
Speaker 1: will do it, something, as we're always you know, not
Speaker 1: sure there's a ton of uncertainty in life, or you're
Speaker 1: not sure how others will do. They're simply more room
Speaker 1: for possibility to guess high if your performance is likely
Speaker 1: to be low, and more room to guess low if
Speaker 1: your performance is likely to be high. And this applies
Speaker 1: to both the self and other people. Since we know
Speaker 1: even less about other people than we do about ourselves,
Speaker 1: we're going to spend more time guessing wrong in these
Speaker 1: vast over and under zones for other people, depending on
Speaker 1: what type of task it is. Now we're going to
Speaker 1: talk about over precision from this two thousand seventeen study. Now,
Speaker 1: over precision again is that that's like having way more
Speaker 1: confidence than you should about what you believe to be true.
Speaker 1: So I could ask you, you know, I could ask
Speaker 1: you to answer a question, Then I could ask you
Speaker 1: how confident you are that your answer is correct? Uh.
Speaker 1: And the authors here right quote results routinely find that
Speaker 1: hit rates inside confidence intervals are below fifty percent, implying
Speaker 1: that people set their ranges too precisely, acting as if
Speaker 1: they're inappropriately confident that their beliefs are accurate. So, if
Speaker 1: you take a quiz, you say you're more than confident
Speaker 1: on average about your answers, and you're actually more like
Speaker 1: fifty percent correct on average. This is something that's been
Speaker 1: found a bunch of times. It's quite clear that there's
Speaker 1: tons of over precision in human behavior. The authors have
Speaker 1: a few critiques about like common research paradigms that that
Speaker 1: are used to study this. One example is they say,
Speaker 1: you know it. It may be that normal people don't
Speaker 1: have a very solid understanding of how to use confidence intervals,
Speaker 1: so there have been other ways of trying to measure it.
Speaker 1: But however, the authors here believe that over precision is
Speaker 1: the most pervasive form of over confidence. You find it
Speaker 1: absolutely every everywhere, even in experts talking about their own
Speaker 1: subject matter. I think that's come up on the show
Speaker 1: before that, I don't remember when. After this, the authors
Speaker 1: here turned to the question UH, a question we talked
Speaker 1: about a little before. Could over confidence actually be useful? Like?
Speaker 1: How do why does it make sense for a brain
Speaker 1: to be overconfident? Uh? And they talk about explanations in
Speaker 1: two main categories, intra personal and interpersonal UH. The authors
Speaker 1: generally think the evidence for the interpersonal explanations the the
Speaker 1: explanations and how it works on other people are stronger
Speaker 1: than the intra personal ones, though there kid could be
Speaker 1: some good intra personal ones. For example, you know, maybe
Speaker 1: over confidence doesn't just make you feel good, it, as
Speaker 1: we hypothesized earlier, makes you more likely to take risks
Speaker 1: that can pay off big. Yeah. Well, I mean, for instance,
Speaker 1: to come to to go to like a predator prey
Speaker 1: scenario like one is reminded of the you know, how
Speaker 1: effective your average editor is. You know they're going to
Speaker 1: fail a lot. And granted, a leopard is not really
Speaker 1: subject to human uh, you know, over confidence or under confidence,
Speaker 1: but certainly if you if you if you look at
Speaker 1: a human scenario, if you look at human hunters, uh,
Speaker 1: you know it, it's certainly a situation where it would
Speaker 1: pay to be overconfident, uh, to a certain degree. Yeah,
Speaker 1: I think you can find some analogies of confidence and
Speaker 1: over confidence and animals like you know, how likely are
Speaker 1: you to try to take down prey animal that you're
Speaker 1: very unlikely to succeed against, but you know, would provide
Speaker 1: you with a lot of meat and energy if you
Speaker 1: do right. Though, of course, the reverse of the other
Speaker 1: side of that is that you would not need want
Speaker 1: to be so overconfident that you were going after prey
Speaker 1: that was extremely likely to kill you if you try
Speaker 1: to bring it down right. But the authors here they
Speaker 1: do think that there's really good evidence for interpersonal benefits
Speaker 1: for over confidence. One example would be all the empirical
Speaker 1: evidence that already exists that just outwardly projecting confidence has
Speaker 1: all these benefit fits affecting how other people see us.
Speaker 1: There are studies that show that highly confident people are
Speaker 1: more persuasive, they're more influential, they're perceived as more sexually attractive,
Speaker 1: they tend to get promoted to positions of authority in groups. Um,
Speaker 1: And it's possible that confidence is actually more important than
Speaker 1: competence in determining who gets promoted to high status positions
Speaker 1: the author's right quote. While a preference for confident leaders
Speaker 1: may make sense if there's a correlation, however, weak, between
Speaker 1: confidence and competence, there is real risk in selecting over
Speaker 1: confident leaders. Well, I mean, because on one hand, you
Speaker 1: you want a boss that can say, you know, do
Speaker 1: their job and and keep the company afloat and actually
Speaker 1: grow the business, etcetera, all the various catchphrases. But you
Speaker 1: also want a boss that you can kind of like
Speaker 1: you can. You can you can trust that they're doing
Speaker 1: their thing like they seem confident. I guess they have
Speaker 1: their whole end of it figured out, and maybe I
Speaker 1: can focus on my own thing and not my own
Speaker 1: role in the company without you freaking out a what's
Speaker 1: going to happen tomorrow? Well, maybe in the business scenario
Speaker 1: we should pivot to talking about the Icarus paradox. Oh,
Speaker 1: all right, we're gonna take a quick break, but we'll
Speaker 1: be right back with more than thank and we're back. So, Robert,
Speaker 1: you wanted to bring in a concept from the business
Speaker 1: world about overconfidence, the Icarus paradox. Yeah, And I'm as
Speaker 1: surprised as maybe some of you are that I'm bringing
Speaker 1: in a something business wise, but it caught my attention
Speaker 1: when I was looking for things on for papers and
Speaker 1: so forth, on over confidence, and also looking at Greek
Speaker 1: mythology and so forth, because yeah, the Acarus paradox invokes
Speaker 1: the story of Charask rather directly. And I think it
Speaker 1: also makes sense at another level, because you know, we
Speaker 1: don't have gods so much anymore, Like these are not
Speaker 1: the driving commanding forces in our world, but we do
Speaker 1: have institutions, industries, global economies. And these are not unlike
Speaker 1: the concepts of the gods, right. You know, they're sometimes lawful,
Speaker 1: sometimes chaotic entities that are likely to destroy you if
Speaker 1: you question their authority, or if you you you turn
Speaker 1: against them. But anyway, I ran across this interesting concept
Speaker 1: of the acress paradox um. It was devised by Canadian
Speaker 1: economist Danny Miller, and he points out that businesses are
Speaker 1: often like Icarus in the myth. They start out confident
Speaker 1: and competent, they rise, but then they perish. Uh. The
Speaker 1: The irony, he writes, is that many of the most
Speaker 1: dramatically successful companies are prone to this exact sort of failure. Uh.
Speaker 1: And and it doesn't necessary in the business sense, since
Speaker 1: businesses are sometimes less likely to die. They're more like
Speaker 1: the gods. You know, they're they have downfalls, but there
Speaker 1: may be they may very well be immortal in some cases. Right,
Speaker 1: they're still alive. They're just chained to a rock getting
Speaker 1: their liver pecked out by an eagle, right for eternity.
Speaker 1: You know, maybe they just declare multiple bankruptcies. Immortal declares bankruptcy.
Speaker 1: It's a different thing than than a corporation doing it. Um. Wait,
Speaker 1: what is that eagle? It's like a private equity eagle. Yeah,
Speaker 1: the private ECU eagle. Um. And yeah, he mentioned several
Speaker 1: companies and discussing this, and and most of them I
Speaker 1: think that he was discussing are still around like they
Speaker 1: have survived their downfalls. Uh. But yeah, yeah. He writes
Speaker 1: that the irony is that that many of these dramatically
Speaker 1: successful companies are prone to these sort of failures. And
Speaker 1: what's more, the very factors that drive success, when taken
Speaker 1: to excess, are the factors that bring about decline. So
Speaker 1: I think this is an interesting model to look at,
Speaker 1: not only for the you know, because it's a just
Speaker 1: to take on it from the business world, but I
Speaker 1: think he can also serve as sort of a reflecting
Speaker 1: pool for some of the individual concepts that we've discussed
Speaker 1: already by placing them out outside of the human psyche
Speaker 1: and looking at them in the context of an organization
Speaker 1: or a culture. So Miller wrote a book about this,
Speaker 1: The Icarous Paradox, How Exceptional Companies bring about their own downfall.
Speaker 1: New Lessons in the Dynamics of Corporate success, Decline, and Renewal.
Speaker 1: I know you love a long title like that. Um.
Speaker 1: But I also I was mainly looking at his Business
Speaker 1: Horizons article that he wrote on the subject, and he
Speaker 1: summarizes a lot of the key points. So Miller identified
Speaker 1: four key to trajectories in the riches to rags business scenario.
Speaker 1: So the first one that he mentions is the focusing trajectory.
Speaker 1: In this trajectory, the craftsman becomes the tinker quote firms
Speaker 1: whose insular, technocratic monocultures alienate customers with perfect but irrelevant offerings.
Speaker 1: So I guess in a scenario would be, you know,
Speaker 1: the company that creates a really groundbreaking product, and then
Speaker 1: all they do is tinker with that concept. All they
Speaker 1: do is make adjustment to that concept, and eventually, like
Speaker 1: somebody else is going to create a better widget or
Speaker 1: a better you know, smartphone, or whatever the situation may be,
Speaker 1: somebody else is going to take some some you know,
Speaker 1: some wider swings. Next comes the venturing trajectory, and this
Speaker 1: is by which builders become imperial list And this one,
Speaker 1: I think is the one that really has the smack
Speaker 1: of overconfidence to it. In this trajectory, the strategy of
Speaker 1: building feeds into over expansion. The goal of growth becomes
Speaker 1: grandeur and an entrepreneurial culture becomes one of the gamesman,
Speaker 1: A divisionalized structure becomes fractured. And then on top of
Speaker 1: that there's the the inventing trajectory. This is where you
Speaker 1: go from pioneering to escapist. In this trajectory, innovation feeds
Speaker 1: into high tech escapism. Science for society transforms into technological utopianism.
Speaker 1: Research and development gives way to think tank culture, and
Speaker 1: the overall culture goes from organic to chaotic. And then
Speaker 1: he rounds us out with the decoupling trajectory from salesman
Speaker 1: to drifter quote. Finally, the decoupling trajectory transforms salesman organizations
Speaker 1: with unparalleled marketing skills, prominent brand names, and broad markets
Speaker 1: into aimless, bureaucratic drifters whose sales fetish obscure is design
Speaker 1: issues and who produce a stale and disjointed line of
Speaker 1: me to offerings. Okay, so that's the company that's more
Speaker 1: based around marketing culture than around having a good product, right.
Speaker 1: You know. Thinking about these trajectories kind of reminds me
Speaker 1: of the peaking in high school stereotype. In life trajectories,
Speaker 1: it's a stereotype, but there is some truth to it.
Speaker 1: I think it's possible that too much success early on
Speaker 1: in life can kind of corrupt a person and can
Speaker 1: kind of corrupt your work ethic, your ability to learn
Speaker 1: from mistakes and mature. It's important for people to experience
Speaker 1: both successes and failures early in life. Yeah, yeah, I
Speaker 1: think so. It kind of comes back to what we
Speaker 1: talked about looking at considering Aristotle's uh summary of hubrists
Speaker 1: saying that the the young and the rich were the
Speaker 1: most likely to engage in it, and the idea that
Speaker 1: perhaps in some scenarios, certainly there there are plenty of
Speaker 1: examples of very wealthy people who got there through defeat,
Speaker 1: like through learning the lessons of defeat. There are also
Speaker 1: examples of of people who have you know, arguably maybe
Speaker 1: you know, never suffered a true defeat like they have.
Speaker 1: They have remains sort of man children, uh kind of
Speaker 1: failed upward. Yeah, that sort of thing. Um. And again
Speaker 1: we're dealing abroad tropes here. But you know, to some extent,
Speaker 1: I think it's useful to consider, uh, to consider these um.
Speaker 1: But but also I feel like it it does get
Speaker 1: too into the idea that that when we're dealing with
Speaker 1: the trajectory of of a human life, you know. Um.
Speaker 1: Part of it is perhaps comes down to just our
Speaker 1: ability to forecast the future, our ability to make long
Speaker 1: to engage in long term planning. Like we're as humans
Speaker 1: were generally not as good about that. We're certainly not
Speaker 1: good about planning beyond uh, you know, the scope of
Speaker 1: a human life. But but even like beyond the scope
Speaker 1: of a of a few years, we're better at the
Speaker 1: short term goals, and it's only with considerable effort that
Speaker 1: we we get better at considering long term goals. Um.
Speaker 1: So I think that's important to keep in mind. And
Speaker 1: all of this now, one thing that I think is
Speaker 1: also interesting in Miller's writings is that he talked he
Speaker 1: he talks a bit about over confidence, you know, as
Speaker 1: a symptom of underlying issues, you know, as opposed to
Speaker 1: being like an intrinsic quality. Uh. He writes, Unfortunately, configuration
Speaker 1: and synergy are usually attained at the cost of myopia.
Speaker 1: Stellar performers view the world through narrowing telescopes. One point
Speaker 1: of view takes over, one set of assumptions comes to dominate.
Speaker 1: The result is complacency and over confidence. And I think
Speaker 1: that plays into a lot of what what we've we
Speaker 1: spoke about earlier. You know. Sorry, I'm trying to make
Speaker 1: sense of it. Given the discuss the word synergy in it,
Speaker 1: I shouldn't know what that means. By now I've purged
Speaker 1: it from my brain. Oh okay, I see now, Yeah,
Speaker 1: I'm looking at the quote. Okay, So no, this is
Speaker 1: this is a very standard thing. Uh. You know, if
Speaker 1: you have successfully hammered several nails in everything and you've
Speaker 1: still got the hammer, everything really starts to look like
Speaker 1: a nail, just because like, if you've had success with
Speaker 1: the strategy and past, you don't switch. You just keep
Speaker 1: doing what you've done before, even if it doesn't make
Speaker 1: sense of that. Yeah, this is the this is what works,
Speaker 1: this is what our product is, and this is what
Speaker 1: we're going to stick to. Um and and then yeah,
Speaker 1: he talks a good bit about to do about over
Speaker 1: confidence as just a result of success, writing quote failure
Speaker 1: teaches leaders valuable lessons, but good results only reinforce their
Speaker 1: preconceptions and tether them more firmly to their tried and
Speaker 1: true recipes. Success also makes managers overconfident, more prone to
Speaker 1: excess and neglect, and more given to shape strategies to
Speaker 1: reflect their own preferences rather than those of the customers.
Speaker 1: And uh, you know. He also points to one of
Speaker 1: the key aspects of the icorous paradox being that overconfident,
Speaker 1: complacent executives extend the very factors that contributed to success
Speaker 1: to the point where they cause decline. So the thing
Speaker 1: that's working, you know, the button we're pushing that is
Speaker 1: leading to success, let's just really jam that sucker. You're
Speaker 1: like the rat in the experien that keeps pushing the
Speaker 1: cocaine button. Yeah. So he summarizes that there are really
Speaker 1: two aspects of the acreous paradox. One is the success
Speaker 1: can lead to failure via the fostering of overconfidence and
Speaker 1: other factors. And then to the aspects of a business
Speaker 1: that brings success can also hasten failure or quote, the
Speaker 1: very causes of success, when extended, may become the causes
Speaker 1: of failure. And as far as you know, ways to
Speaker 1: fight these transformations. Because that's when one question I had,
Speaker 1: It's like, is this just the trajectory? This is what happens?
Speaker 1: Like this is things can't just go up forever and
Speaker 1: a business cannot just exist, you know, indefinitely, like things
Speaker 1: have to die, right, I mean, these corporations are not
Speaker 1: like you mortals, but they are given to life and death.
Speaker 1: They're not eternal. Uh and and he says, he argues
Speaker 1: that there are ways to fight these transformations. He suggests
Speaker 1: self reflection and intelligence gathering that guards against excess, over
Speaker 1: confidence and irrelevance. And this, this I think matches up
Speaker 1: with what we've been talking about so far in the
Speaker 1: individual level, Like like, if you think you're you're gracious,
Speaker 1: like take a step back and and and uh and
Speaker 1: and think in the question whether you know you actually
Speaker 1: are to what extent you are? What else you could
Speaker 1: be doing to ensure that that that you were actually
Speaker 1: living up to your overestimation of self. If you think
Speaker 1: it's true about yourself, prove it, Prove it to you. Yeah,
Speaker 1: I have to say Miller is a is a is
Speaker 1: a really good writer about it this because normally I'm
Speaker 1: not interested in business culture type stuff like this, but
Speaker 1: but he does a great job of like tying it
Speaker 1: back into just the basic human scenario as well, Like
Speaker 1: like he points out that excellence in any human endeavor,
Speaker 1: be at arts or sports or what have you, you know,
Speaker 1: it tends to come at a price. We cannot excel
Speaker 1: at everything. We have to make sacrifices and choose what's
Speaker 1: important in the middle of the road, or a jack
Speaker 1: of all trades approach is not going to lead to greatness,
Speaker 1: you know, unless it's a story or some fable where
Speaker 1: greatness is just thrust upon somebody. You know, Uh, there's
Speaker 1: got to be some sort of trade off there. And
Speaker 1: he says it goes for the individual, but it also
Speaker 1: applies to companies as well. You can only sharpen your
Speaker 1: blade if you first realize that it is dull and
Speaker 1: must be sharpened. You know, like if if you if
Speaker 1: you believe yourself eternally and infinitely sharp, you're not going
Speaker 1: to do the sharpening right. And it's interesting to come
Speaker 1: back and think about the individual level and think about
Speaker 1: over confidence in this scenario, like one like basic trophy
Speaker 1: mentions is the idea of say, you know, the artist
Speaker 1: who neglects their family to focus on their art, or
Speaker 1: a business person that does the same thing. In those scenarios,
Speaker 1: might it be you know, I guess you know, maybe
Speaker 1: in a warped sensor in a way that that that
Speaker 1: caters to their their prime focus. Might it be beneficial
Speaker 1: to just think, oh, I'm a good dad, I'm a
Speaker 1: good husband, even when they're not. But it enables them
Speaker 1: to then put all of their more of their resources
Speaker 1: anyway into the pursuit of the thing that ultimately matters
Speaker 1: to them, like you know, card, hard cold cash, or
Speaker 1: the pursuit of art. Yeah. Well, so to be clear,
Speaker 1: obviously this wouldn't mean that it's actually useful in being
Speaker 1: a good person, have any good life, but it may
Speaker 1: very well be useful in focusing on whatever it is
Speaker 1: that really matters to you, to be overconfident about your
Speaker 1: your crappy efforts in other areas of life. Yeah, I
Speaker 1: think that's entirely true. So it's it's Yeah, it's interesting
Speaker 1: to compare the two, the corporate version of this in
Speaker 1: the individual version of this. And certainly if you want
Speaker 1: to read more about this idea of the acreous paradox,
Speaker 1: I certainly recommend checking out more of his writings. So
Speaker 1: we have all these economic metaphors, like you know from
Speaker 1: Adam Smith, the Invisible Hand and whatever, I feel like
Speaker 1: we need an economic metaphor of the nemesis, Like the
Speaker 1: Nemesis that is this force in the market that swoops
Speaker 1: into punish hubrist and over confidence in business. Yeah, sometimes
Speaker 1: it seems like Nemesis is a little a little uh
Speaker 1: resistant to doing that. I don't know, I mean, part
Speaker 1: of it comes down again to the fact that that
Speaker 1: businesses and corporations are are are less mortal. Well, yeah,
Speaker 1: I mean it is funny that, uh, we've discussed a
Speaker 1: lot of these episodes how overconfidence can both lead to
Speaker 1: disaster and and negative outcomes, but can also in some
Speaker 1: cases be highly rewarded and be very lucrative. Yeah. Yeah,
Speaker 1: you know, I'm also remind talking about, you know, curbing
Speaker 1: overconfidence or the perception of overconfidence by making statements that
Speaker 1: cannot be put to the test. You of course see
Speaker 1: that a lot in the business world. You know that
Speaker 1: if you're saying you're the best car dealership in the galaxy,
Speaker 1: you know that you can get away with saying you're
Speaker 1: the best car dealership in town. Well, then people can say, well,
Speaker 1: let's see your sales numbers, let's compare you to gems
Speaker 1: across town. No, even that would be easier to get
Speaker 1: away with, Like the one that would be hard to
Speaker 1: get away with is saying like we have the lowest
Speaker 1: prices in town or something like that. Then you're like,
Speaker 1: then you're stuck either that's true or that's not right.
Speaker 1: But then again, on a personal the first all level,
Speaker 1: you know, you can have your mug that says world's
Speaker 1: Greatest dad and nobody's gonna call you on that. What
Speaker 1: you can get out your dad ruler and measure me. Yeah,
Speaker 1: all right, So I think we've we've reached the end
Speaker 1: of our discussion here for the week on overconfidence, but
Speaker 1: clearly there's a there's a lot of material here. It'll
Speaker 1: be interesting to hear back from listeners because I think
Speaker 1: we all have some perspective on this. We all have
Speaker 1: experience with with over confidence in others or certainly in
Speaker 1: over confidence in ourselves or the management of overconfidence in ourselves,
Speaker 1: and so we we'd love to hear everyone's thoughts on this.
Speaker 1: In the meantime, if you want to check out other
Speaker 1: episodes of Stuff to Blow your Mind, you can find
Speaker 1: them wherever you find your podcasts. If you go to
Speaker 1: stuff to Blow your Mind dot com, that will lead
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Speaker 1: to be. Just make sure you rate, review, and subscribe
Speaker 1: that really helps us out huge thanks as always to
Speaker 1: our excellent audio producer Seth Nicholas Johnson. If you would
Speaker 1: like to get in touch with us with back on
Speaker 1: this episode or any other to suggest topic for the future,
Speaker 1: just to say hey, you can email us at contact
Speaker 1: at stuff to Blow your Mind dot com. Stuff to
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