Overconfidence can lead to poor decisions from "summary" of Judgment in Managerial Decision Making by Max H. Bazerman,Don A. Moore
The phenomenon of overconfidence represents a common cognitive bias that can significantly impact decision-making processes in managerial contexts. When individuals exhibit overconfidence, they tend to have excessive faith in their own abilities, knowledge, and judgments, leading them to believe that they are more competent and accurate than they actually are. This overestimation of one's capabilities can have detrimental consequences, as it can lead individuals to make suboptimal decisions based on faulty assumptions and incomplete information. One of the key reasons why overconfidence can result in poor decision-making is that it can lead individuals to ignore or downplay important risks and uncertainties associated with their choices. When individuals are overly confident in their assessments, they may fail to adequately consider alternative perspectives, potential pitfalls, and potential sources of error. This can prevent them from engaging in thorough and critical analysis, resulting in decisions that are based on flawed reasoni...
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