EDINBURGH, Scotland, Sept. 18 (UPI) — Overconfidence, or self-delusion, actually beats accurate assessments in sports, business or war, but it can also backfire, Scottish and U.S. researchers say.
Dr. Dominic Johnson, part of the research team at the University of Edinburgh in Scotland and the University of California, San Diego, used a mathematical model to simulate the effects of overconfidence over generations — pitting overconfident, accurate and under-confident strategies against each other.
The paper, published in the journal Nature, finds overconfidence frequently brings rewards — as long as the spoils of conflict are sufficiently large compared with the costs of competing for them. In contrast, people with unbiased, accurate perceptions usually fare worse, the study says.
The implications are that, over a long period of time, the evolutionary principal of natural selection is likely to have favored a bias toward overconfidence so someone who is abundantly confident would have more descendants than someone rife with insecurities, the researchers say.
However, this bold approach also has high risk. The study authors cite the 2008 financial crash and the 2003 Iraq war as just two examples of when extreme overconfidence backfired.
“The model shows that overconfidence can plausibly evolve in wide range of environments, as well as the situations in which it will fail,” Johnson says in a statement.
“The question now is how to channel human overconfidence so we can exploit its benefits while avoiding occasional disasters.”