Why we overestimate our abilities and how it threatens

What is the essence of the effect

The overconfidence effect is the tendency to overestimate one's knowledge and skills, to consider oneself better than others. It applies to all skills and qualities: you can consider yourself smarter, friendlier, more honest, more conscientious than those around you. Or believe that you have a lot of chances of success, when in reality everything is not the case.

This phenomenon is also called the Lake Wobegon effect - the name is given in honor of a fictional town from the popular American radio play. In Lake Wobegon, "all women are strong, men are attractive, and children are above average."

Overconfidence usually manifests itself in three ways:

You overestimate your own capabilities. You are convinced that you have enough ability to get the job done, that you have enough control over the situation. This bias is more likely to affect complex tasks that have a high likelihood of failure.
You think you are superior to others. That is, believe that your skills are above average or better than those around you. This usually manifests itself when working with tasks that, in your opinion, do not require much work.
You are unreasonably confident in the correctness of your judgments. This aspect concerns the evaluation of any questions.

What is its reason

Exposure to this effect varies across cultures. There is a hypothesis that it is more pronounced in countries with high levels of economic inequality. In 2011, psychologists tested this by interviewing 1,600 participants. Among them were representatives of 15 nations from five continents, mostly students. Participants were asked to rate the character traits from the list by answering two questions: "How characteristic is this trait for you compared to the average person?" and "How desirable is this trait for you?"

The survey showed that people from countries with high levels of economic inequality (Peru, South Africa, USA) were more likely to think they were better than others. And participants from states where the incomes of the population are approximately equal (Belgium, Japan, Germany), less often overestimated themselves.

Scientists have not yet been able to explain the reason for this relationship. They believe it may be a competitive spirit that reinforces economic inequality in people. In a situation where wealth is very unevenly distributed, and you need a job with a good salary, it is logical to discard modesty and present yourself as a person who compares favorably with others.

Why is it dangerous and how to protect yourself

The overconfidence effect is called one of the most common and potentially dangerous thinking mistakes. Perhaps it is he who provokes lawsuits, wars and stock market crashes.

For example, when the plaintiff and the defendant are equally convinced of their righteousness and virtue, lawsuits are dragged out. When states are confident in the superiority of their armies, their willingness to unleash military action increases. When market participants value stocks too high, the likelihood of riskier trades increases. The same effect often becomes the reason for the ruin of companies, the failure of projects and non-fulfillment of forecasts.

Remember that your judgments about your own skills and chances of success are very subjective. Do not rely on them blindly, calculate the likelihood of a negative outcome of events. And when making plans, consider that you can fall into the trap of thinking.

Lifehacker has a book called “The Pitfalls of Thinking. Why our brain plays with us and how to beat it. In it, based on science, we sort out the traps one by one and give tips that will help you outwit your brain.