Overconfidence Effect from "summary" of Thinking, Fast and Slow: by Daniel Kahneman | Summary & Analysis by Elite Summaries

The Overconfidence Effect is the phenomenon of individuals having an unwarranted faith in their own abilities. This can lead to poor decision-making and unrealistic expectations.

The Overconfidence Effect occurs when people have difficulty interpreting objective information and instead rely heavily on subjective interpretations.

Everyone has some level of overconfidence but it is possible to use strategies such as asking for others’ opinions or consulting different sources of information to overcome this instinctive bias.

It is important to recognize when one might be overconfident and subjectively interpret things. This will help you avoid incorrect decisions due to biased thinking.

Overconfidence involves making decisions that are based on too much self-belief or overestimation of one's ability, without considering other factors.

Additionally, recognizing and keeping a watchful eye on what actions may be influenced by your overconfidence can help reduce its effects.

This behavior can create a bias which can lead to bad performance results since it causes people to trust their opinions more than is appropriate.

As such, this effect can hinder decision-making processes because people are not taking into account all available data and facts about a particular situation.