Is confidence in one's knowledge good or bad? An Empirical investigation into the behavioral effects of confidence

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Abstract

Common wisdom suggests that a lack of confidence is a barrier to successful performance in many area of life, such as success in business, success in college, etc.  Thus, a great deal of attention – both in academic literatures and in the common press – is spent on finding ways to increase people’s confidence. The idea is that underperforming individuals could better reach their potential if their confidence levels could just be enhanced. Notably, this idea stands in stark contrast to the prevailing view in the behavioral decision making field, which has shown repeatedly that people are overconfident in a wide range of situations. By this account, increasing people’s confidence should just serve to increase their (already high) levels of overconfidence. This overconfidence, in turn, has been assumed to have negative effects, such as increasing maladaptive risk taking and ignoring relevant information.

Perhaps surprisingly, however, little research – either within or outside the JDM literature – has empirically examined the effects of confidence. This talk will focus on work that I’m conducting as part of an NSF-funded grant with my collaborator Andy Parker from RAND Corporation that aims to address this gap. I will focus first on some methodological issues relevant to this question, e.g., how to manipulate confidence without influencing one’s knowledge. Then, I’ll discuss some of the substantive issues that our research is addressing, ending with a discussion of how people’s knowledge levels influence the role of confidence in positive or negative decision outcomes.

The Speaker

Eric R. Stone is a professor of psychology at Wake Forest University, whose work focuses on judgment and decision making. His primary topics of inquiry involve risk communication (how to convey information about risks so that people can use this information to make informed judgments), decision making for others (how people make decisions for others and how these decisions differ from decisions for the self), and the effects of unjustified confidence (the topic of this seminar).