Quotes About Confidence

Our understanding of cognitive ease and associative coherence locates subjective confidence firmly in System 1.

recurrent theme of this book: many people are overconfident, prone to place too much faith in their intuitions.

overconfidence is a direct consequence of features of System 1 that can be tamed—but not vanquished. The main obstacle is that subjective confidence is determined by the coherence of the story one has constructed, not by the quality and amount of the information that supports it.

If it is the only one that comes to mind, it may be subjectively undistinguishable from valid judgments that you make with expert confidence. This is why subjective confidence is not a good diagnostic of accuracy: judgments that answer the wrong question can also be made with high confidence

As I had discovered from watching cadets on the obstacle field, subjective confidence of traders is a feeling, not a judgment. Our understanding of cognitive ease and associative coherence locates subjective confidence firmly in System 1.

When the handsome and confident speaker bounds onto the stage, for example, you can anticipate that the audience will judge his comments more favorably than he deserves.

puzzling limitation of our mind: our excessive confidence in what we believe we know, and our apparent inability to acknowledge the full extent of our ignorance and the uncertainty of the world we live in.

Overconfidence: As the WYSIATI rule implies, neither the quantity nor the quality of the evidence counts for much in subjective confidence.

We are confident when the story we tell ourselves comes easily to mind, with no contradiction and no competing scenario. But

Those who know more forecast very slightly better than those who know less. But those with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident. "We reach the point of diminishing marginal predictive returns for knowledge disconcertingly quickly," Tetlock writes.

But those with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident. "We reach the point of diminishing marginal predictive returns

We focus on what we know and neglect what we do not know, which makes us overly confident in our beliefs.

When the handsome and confident speaker bounds onto the stage, for example, you can anticipate that the audience will judge his comments more favorably than he deserves. The availability of a diagnostic label for this bias—the halo effect—makes it easier to anticipate, recognize, and understand.

la confianza viene determinada por la coherencia de la mejor historia que podamos contar partiendo de la evidencia.

The difficulties of statistical thinking contribute to the main theme of Part 3, which describes a puzzling limitation of our mind: our excessive confidence in what we believe we know, and our apparent inability to acknowledge the full extent of our ignorance and the uncertainty of the world we live in. We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.

Social psychology comes into the picture here, because the answer that a truthful CFO would offer is plainly ridiculous. A CFO who informs his colleagues that "there is a good chance that the S&P returns will be between –10% and +30%" can expect to be laughed out of the room. The wide confidence interval is a confession of ignorance, which is not socially acceptable for someone who is paid to be knowledgeable in financial matters.

System 1 is designed to jump to conclusions from little evidence—and it is not designed to know the size of its jumps. Because of WYSIATI, only the evidence at hand counts. Because of confidence by coherence, the subjective confidence we have in our opinions reflects the coherence of the story that System 1 and System 2 have constructed. The amount of evidence and its quality do not count for much, because poor evidence can make a very good story.

When action is needed, optimism, even of the mildly delusional variety, may be a good thing.

many people are overconfident, prone to place too much faith in their intuitions. They

Further experiments showed that people were driven to overstate the accuracy not only of their original predictions but also of those made by others.

We are confident when the story we tell ourselves comes easily to mind, with no contradiction and no competing scenario. But ease and coherence do not guarantee that a belief held with confidence is true.

Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it.

And it is natural for System 1 to generate overconfident judgments, because confidence, as we have seen, is determined by the coherence of the best story you can tell from the evidence at hand. Be warned: your intuitions will deliver predictions that are too extreme and you will be inclined to put far too much faith in them.

Furthermore, System 2 has no control over the effect and no knowledge of it. The participants who have been exposed to random or absurd anchors (such as Gandhi's death at age 144) confidently deny that this obviously useless information could have influenced their estimate, and they are wrong.