When overconfidence is revealed to others: Testing the status-enhancement theory of overconfidence
Abstract
The status-enhancement theory of overconfidence proposes that overconfidence pervades self-judgment because it helps people attain higher social status. Prior work has found that highly confident individuals attained higher status regardless of whether their confidence was justified by actual ability (Anderson, Brion, Moore, & Kennedy, 2012). However, those initial findings were observed in contexts where individuals’ actual abilities were unlikely to be discovered by others. What happens to overconfident individuals when others learn how good they truly are at the task? If those individuals are penalized with status demotions, then the status costs might outweigh the status benefits of overconfidence – thereby casting doubt on the benefits of overconfidence. In three studies, we found that group members did not react negatively to individuals revealed as overconfident, and in fact still viewed them positively. Therefore, the status benefits of overconfidence outweighed any possible status costs, lending further support to the status-enhancement theory.
... The role of overconfidence in CEOs appears more ambiguous. On one hand, the overconfident leaders possess emotional and cognitive resilience, enabling them to pursue high-risk projects and challenges (Hayward et al. 2004) without significant scrutiny from shareholders, analysts, or the media (Kennedy, Anderson, and Moore 2013). On the other hand, overconfidence may lead to an underestimation of risks, despite these leaders' strong commitments to innovation, proactivity, and competitiveness (Campbell, Goodie, and Foster 2004). ...
A Chief Executive Officer (CEO) holds key responsibilities, including directing strategies, making crucial decisions, and leading the firm toward achieving its objectives. The success or failure of a company largely depends on its leadership and its commitment to sustainability, which are closely tied to the personalities of its key players.
Our bibliometric and Systematic Literature Review provides valuable insights into this relationship, addressing various research perspectives on CEOs' personality traits and corporate leadership. Our findings reveal that academic studies predominantly focus on analyzing dark personality traits, especially narcissism and overconfidence, due to the positive public perceptions these traits often generate. Notably, we suggest that these traits may be positively associated with environmental proactivity, especially in promoting initiatives to combat climate change.
Conversely, fewer studies have examined bright personality traits that we advocate may be more effective to advancing social policies such as those promoting diversity, equity, and inclusion or protection of human rights.
In this vein, we propose an integrative and holistic research agenda to guide future studies. Additionally, we highlight the importance of considering CEOs' personality traits during recruitment, selection, and triaging processes.
... Classical models for such opinion dynamics assume that all individuals are alike to simplify their analysis. However, this simplification does not reflect the extent of heterogeneity found in real systems, whether natural [18][19][20][21][22] or synthetic 23 : The inter-individual variations of agents can manifest in multiple aspects, e.g., in behavioral traits 24 , position in the network 25,26 , information access 27 , or self-confidence 28 . ...
Natural and artificial collectives exhibit heterogeneities across different dimensions, contributing to the complexity of their behavior. We investigate the effect of two such heterogeneities on collective opinion dynamics: heterogeneity of the quality of agents’ prior information and of degree centrality in the network. To study these heterogeneities, we introduce uncertainty as an additional dimension to the consensus opinion dynamics model, and consider a spectrum of heterogeneous networks with varying centrality. By quantifying and updating the uncertainty using Bayesian inference, we provide a mechanism for each agent to adaptively weigh their individual against social information. We observe that uncertainties develop throughout the interaction between agents, and capture information on heterogeneities. Therefore, we use uncertainty as an additional observable and show the bidirectional relation between centrality and information quality. In extensive simulations on heterogeneous opinion dynamics with Gaussian uncertainties, we demonstrate that uncertainty-driven adaptive weighting leads to increased accuracy and speed of consensus, especially with increasing heterogeneity. We also show the detrimental effect of overconfident central agents on consensus accuracy which can pose challenges in designing such systems. The opportunities for improved performance and observablility suggest the importance of considering uncertainty both for the study of natural and the design of artificial heterogeneous systems.
... Specifically, they speak to the characteristics that lead to attaining high or low status. In addition to demographic characteristics [49], personality traits [9], self-perceptions [32], and competence [50], it appears that individuals' perceived motivation to have high status also plays an important role in determining their status. We also believe this finding primarily speaks on the prestige pathway of the dual pathways literature [5,6], but future research should consider the implications of this finding on the dominance pathways for the attainment of social rank. ...
In multiple studies, we found that people who are viewed as possessing a stronger desire for status are, ironically, afforded lower status by others. Coworkers who were viewed as having a higher (versus lower) desire for status (Study 1a and 1b), and individuals who were described as having a higher desire for status (versus a lower desire for status or no information), were afforded lower status (Studies 2, 3a, and 3b). Mediation analyses and an experimental manipulation of the mediator (Study 3a and 3b) suggested that the observed negative effect of desire for status on status was mediated primarily by perceptions of low prosociality. These findings have important implications for status organizing processes in groups.
Expressions of confidence can give leaders credibility. In the political realm, they can earn votes and public approval for decisions made in office. Such support is justified when the confidence displayed is truly a sign that a leader (whether a candidate or an incumbent) is competent. However, when politicians are overconfident, the result can be the election of incompetent leaders and the adoption of misguided policies. In this article, we discuss processes that can lead to a confidence “arms race” that encourages politicians to display more confidence than their rivals do. We also illustrate how overconfidence and hyperbole have impaired responses to the COVID-19 pandemic in many nations and offer guidance for distinguishing politicians who display levels of confidence that reflect their true assessment of a situation from those who fake their self-assurance. We then suggest ways that leaders in all spheres can convey uncertainty honestly without losing credibility, and we propose a way to prevent overconfidence from resulting in ineffective or counterproductive legislation.
The intelligence failures surrounding the invasion of Iraq dramatically illustrate the necessity of developing standards for evaluating expert opinion. This book fills that need. Here, Philip E. Tetlock explores what constitutes good judgment in predicting future events, and looks at why experts are often wrong in their forecasts. Tetlock first discusses arguments about whether the world is too complex for people to find the tools to understand political phenomena, let alone predict the future. He evaluates predictions from experts in different fields, comparing them to predictions by well-informed laity or those based on simple extrapolation from current trends. He goes on to analyze which styles of thinking are more successful in forecasting. Classifying thinking styles using Isaiah Berlin's prototypes of the fox and the hedgehog, Tetlock contends that the fox--the thinker who knows many little things, draws from an eclectic array of traditions, and is better able to improvise in response to changing events--is more successful in predicting the future than the hedgehog, who knows one big thing, toils devotedly within one tradition, and imposes formulaic solutions on ill-defined problems. He notes a perversely inverse relationship between the best scientific indicators of good judgement and the qualities that the media most prizes in pundits--the single-minded determination required to prevail in ideological combat. Clearly written and impeccably researched, the book fills a huge void in the literature on evaluating expert opinion. It will appeal across many academic disciplines as well as to corporations seeking to develop standards for judging expert decision-making.
The authors report two longitudinal studies of new college roommates (Ns = 69 and 95 pairs). In both studies, targets' initial self-views predicted changes in perceivers' appraisals of them, and perceivers' initial appraisals predicted changes in targets' self-views, although relatively few dyads displayed both effects. The perceiver-driven and target-driven effects occurred when appraisals and self-views were negative as well as positive. Implications for self-verification theory and symbolic interactionism are discussed, and a less restrictive model of how appraisals influence self-views is proposed.
A general theory of domain identification is used to describe achievement barriers still faced by women in advanced quantitative areas and by African Americans in school. The theory assumes that sustained school success requires identification with school and its subdomains; that societal pressures on these groups (e.g., economic disadvantage, gender roles) can frustrate this identification; and that in school domains where these groups are negatively stereotyped, those who have become domain identified face the further barrier of stereotype threat, the threat that others' judgments or their own actions will negatively stereotype them in the domain. Research shows that this threat dramatically depresses the standardized test performance of women and African Americans who are in the academic vanguard of their groups (offering a new interpretation of group differences in standardized test performance), that it causes disidentification with school, and that practices that reduce this threat can reduce these negative effects.
The widely reported "epidemic of medical error" has resulted in calls to find systems that prevent, detect, and correct errors. Our incident investigations indicated that specimen-processing personnel often facilitated negative patient outcomes by failing to prioritize work or modify rules in critical situations. Our team developed a knowledge and problem-solving assessment for specimen-processing personnel in order to identify opportunities for training. We included a self-assessment and found that poor performers grossly overestimated their knowledge and problem-solving ability. This study illustrates the utility of using competency challenges to identify opportunities for improvement.
The reward and communication systems of science are considered.