MONDAY, 26 SEPTEMBER 2011Overestimating one’s capabilities increases ambition and morale, and produces a self-fulfilling prophecy by enhancing the likelihood of success. However, believing you are better than you are also leads to misplaced judgement and unrealistic expectations.
Overconfidence, and underestimating the opponent, has been blamed for countless disasters, from the First World War to the recent financial crisis. How then has this trait of positively deluding oneself survived evolution, a process which usually eliminates damaging characteristics?
One explanation is that overconfidence leads to positive outcomes in competition or conflict. A model based on evolutionary game theory has been developed to investigate how individuals perform against each other when competing. It involves two individuals with a single resource available to them; the individuals choose whether or not to claim the resource based on their perception of their opponent’s abilities, risking conflict if the other individual also makes a claim.
The model shows that overconfidence pays off when the prize outweighs the costs involved . In fact, it appears that the more dangerous the situation, the more likely we are to be overconfident, whether that be in sports contests, court cases or war.
Written by Mrinalini Dey