Daniel Kahneman on Overconfidence and the Illusion of Validityby David Zahl on Oct 27, 2011 • 3:15 pm 1 Comment
A follow-up to David Brooks’ recent tribute to Noble Prize winning psychologist Daniel Kahneman in the form of a new article by Kahneman himself on the perils of confidence as they apply to leadership, finance and intuition, “Don’t Blink! The Hazards of Confidence.” Apparently, there exists demonstrably little evidence that the oh-so-marketable quality known as “confidence” has any bearing on actual skill or expertise, that if anything it is a reliable indicator of self-delusion. Which might not be the most shocking discovery in the history of the world, but translate it into the religious realm and you have what some might consider a rather cynical explanation for why certain churches and theologies continue to proliferate, despite ample proof, both behavioral and intellectual, contradicting their position(s). Or maybe it’s simply another encouragement to “get out of the judgement game as soon as possible” (R. Capon), that there’s really only one expert who can be counted upon. At the very least, the studies Kahneman cites represent a few more arrows in the quiver of an anthropology which gives supremacy to emotion rather than intellect:
The exaggerated expectation of consistency is a common error. We are prone to think that the world is more regular and predictable than it really is, because our memory automatically and continuously maintains a story about what is going on, and because the rules of memory tend to make that story as coherent as possible and to suppress alternatives. Fast thinking is not prone to doubt.
The confidence we experience as we make a judgment is not a reasoned evaluation of the probability that it is right. Confidence is a feeling, one determined mostly by the coherence of the story and by the ease with which it comes to mind, even when the evidence for the story is sparse and unreliable. The bias toward coherence favors overconfidence. An individual who expresses high confidence probably has a good story, which may or may not be true.
I coined the term “illusion of validity” because the confidence we had in judgments about individual soldiers was not affected by a statistical fact we knew to be true — that our predictions were unrelated to the truth. This is not an isolated observation. When a compelling impression of a particular event clashes with general knowledge, the impression commonly prevails. And this goes for you, too. The confidence you will experience in your future judgments will not be diminished by what you just read, even if you believe every word…
The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the industry. Facts that challenge such basic assumptions — and thereby threaten people’s livelihood and self-esteem — are simply not absorbed. The mind does not digest them. This is particularly true of statistical studies of performance, which provide general facts that people will ignore if they conflict with their personal experience…
Overconfidence arises because people are often blind to their own blindness. True intuitive expertise is learned from prolonged experience with good feedback on mistakes. You are probably an expert in guessing your spouse’s mood from one word on the telephone; chess players find a strong move in a single glance at a complex position; and true legends of instant diagnoses are common among physicians.
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