Overconfidence can lead to poor choices from "summary" of Misbehaving by Richard H Thaler
Overconfidence is a common human tendency that can have significant consequences, especially when it comes to decision-making. When individuals are too confident in their abilities or knowledge, they may overlook important information or fail to consider the potential risks involved in a decision. This can lead to poor choices that result in negative outcomes. In my research and observations, I have found that overconfidence is often rooted in cognitive biases that distort our perception of reality. For example, individuals may be overly optimistic about their chances of success, leading them to take on more risk than is prudent. This can be particularly dangerous in situations where the stakes are high, such as in financial investments or strategic business decisions. Moreover, overconfidence can also lead individuals to dismiss valuable feedback or advice from others. When people are convinced of their own infallibility, they may ignore warnings or alternative viewpoints...
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