People's Overconfidence in Probability Distributions Leads to Costly Mistakes.
Overconfidence is common when people make guesses about uncertain events. In four experiments, researchers found that people tend to be too confident in their predictions because they don't consider their own lack of knowledge. Even though they know they are unsure about the outcome, they still don't spread out their guesses enough to reflect this uncertainty. This study shows that overconfidence in probability distributions is due to not accounting for personal uncertainty, offering new insights into this bias.