Systematic tendency to overestimate the accuracy of our beliefs and predictions, especially in low-validity environments.
Financial experts make confident stock predictions that perform no better than random selection. Clinical psychologists are highly confident in patient diagnoses that have near-zero validity. Both groups have compelling narratives but not predictive accuracy.
Confidence reflects accuracy—confidence often reflects narrative coherence and is poorly calibrated to actual performance, especially in low-validity domains.
Thinking, Fast and Slow
Daniel Kahneman
After an outcome is known, we can't help but see it as having been predictable, underestimating how uncertain it was beforehand.
The tendency to construct coherent stories that explain past events, creating an illusion of understanding and predictability.
High confidence in predictions based on coherent stories, even when predictive validity is low or zero.
After an outcome is known, we can't help but see it as having been predictable, underestimating how uncertain it was beforehand.
The tendency to construct coherent stories that explain past events, creating an illusion of understanding and predictability.
Why does expertise sometimes increase overconfidence more than accuracy?
How does hindsight bias contribute to overconfidence bias?
Intuitive expertise is genuine in high-validity environments (stable patterns, rapid feedback) but illusory in low-validity environments (unstable, delayed feedback).