The trouble with overconfidence.

TLDR

The study aims to reconcile three definitions of overconfidence—overestimation, overplacement, and overprecision—by proposing a unified framework. The authors introduce a straightforward theory that explains the observed inconsistencies among these overconfidence types. Experimental results show that overestimation and overplacement reverse on different task difficulties, while overprecision remains persistent and attenuates both overestimation and overplacement.

Abstract

The authors present a reconciliation of 3 distinct ways in which the research literature has defined overconfidence: (a) overestimation of one's actual performance, (b) overplacement of one's performance relative to others, and (c) excessive precision in one's beliefs. Experimental evidence shows that reversals of the first 2 (apparent underconfidence), when they occur, tend to be on different types of tasks. On difficult tasks, people overestimate their actual performances but also mistakenly believe that they are worse than others; on easy tasks, people underestimate their actual performances but mistakenly believe they are better than others. The authors offer a straightforward theory that can explain these inconsistencies. Overprecision appears to be more persistent than either of the other 2 types of overconfidence, but its presence reduces the magnitude of both overestimation and overplacement.