Overconfidence Effect

What is the overconfidence effect?

The overconfidence effect, often called overconfidence bias, is a mismatch between a person’s confidence and an appropriate measure of accuracy or performance. Moore and Healy (2008) distinguish three forms: overestimation of one’s performance, overplacement relative to other people, and overprecision in one’s beliefs.

These measures can give different results for the same person. In their research, difficult tasks could produce overestimation of an absolute score alongside underestimation of relative standing.

Confidence or risk-taking alone is not evidence of overconfidence. Assessing it requires specifying the judgment and comparing it with the relevant outcome, performance measure, or uncertainty.

Overconfidence bias examples

• A student who predicts a score of 90 but scores 60 illustrates overestimation.
• Someone who predicts a top-ten class rank but finishes near the middle illustrates overplacement.
• A forecast that allows only a very narrow range of outcomes despite substantial uncertainty illustrates overprecision.

These are hypothetical examples of different comparisons, not three labels for the same measurement.