Confident, But Wrong

We like confident people. We like people who can tell us something direct and simple to understand while being confident in the statements they make. It makes our job as a receiver easier. We can trust someone with confidence because surely they have thought out what they say, and surely their lack of ambivalence or hesitation means they have solid evidence and a logical coherence to the ideas they are expressing.

 

The problem, however, is that confidence and accuracy are not actually linked. We can be very confident in something that isn’t accurate, true, or correct. What is even worse, it can be hard for us ourselves to recognize when our confidence is misplaced. As Daniel Kahneman writes in his book Thinking Fast and Slow, “We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are.”

 

We need to surround ourselves with thoughtful people with expertise in important areas where we will be making crucial decisions. We need to collect input from more than one person before we express complete confidence in another person, idea, or prediction. In the real world, this isn’t often possible, but it is something we should at least be aware of.

 

Trusting confident people is a way of answering an easier question in place of a more difficult question. The question might be, should we invest in this mutual fund or that mutual fund, or should we have a totally different investment strategy that doesn’t involve mutual funds. Instead of asking ourselves how we should invest our savings and doing the difficult research to understand the best strategy for ourselves, we switch to a different question and ask, “do I trust the financial advisor giving me the investment advice?” This is an easier question for us to answer. If the advisor sounds smart, has awards on their desk or wall, and exudes confidence, then they are going to appear more trustworthy, and we will believe what they say. They can present us with a lot of confidence, but be totally wrong, and we will likely go with their recommendations anyway.

 

As Kahneman explains, however, outside observers can help us overcome these confidence traps in ourselves and in how we perceive others. If we have a reliable person with knowledge of a certain area, they can help us think through our arguments to determine if we should be as confident as we are. They can help us evaluate the claims of others, to determine whether their confidence is also well deserved or needs more scrutiny. What is important to remember is that we use confidence as a heuristic, and sometimes we can be confident, but wrong with our thoughts and opinions on a given subject.

Leave a Reply