Researchers have long known that people are very often overconfident – that they tend to believe they are more physically talented, socially adept and competent at their jobs than they actually are. For example, 94% of college professors think they do an above average job (which is almost impossible, statistically speaking). But this overconfidence can also have detrimental effects on their performance and decision-making. So why, in light of these negative consequences, is overconfidence still so prevalent?
The lure of social status fosters overconfidence, says Haas School associate professor Cameron Anderson. He has co-authored a new study, “A Status-Enhancement Account of Overconfidence”, with Sébastien Brion, Assistant Professor of People Management in Organizations, IESE Business School, University of Navarre, Haas School colleagues Don Moore, associate professor of management, and Jessica A. Kennedy, now a post-doctoral fellow at the Wharton School of Business. The study will be published in the Journal of Personality and Social Psychology (future).
“Our studies found that being overconfident helped people achieve social status. People who believed themselves to be better than others, even when they weren’t, were given a higher place in the social scale. And the motive of achieving higher social status thus stimulated overconfidence,” says Anderson, holder of the Lorraine Tyson Mitchell Chair in Leadership and Communication II at the Haas School.
Social status is the respect, prominence and influence that individuals enjoy in the eyes of others. In working groups, for example, people of higher status tend to be more admired, listened to, and have more control over group discussions and decisions. These “alphas” of the group have more influence and prestige than the other members. Anderson says these research findings are important because they help shed light on a long-standing conundrum: why overconfidence is so common, despite its risks. His findings suggest that the mistaken belief that one is better than others has profound social benefits for the individual.
Moreover, these results suggest a reason why, in organizational contexts, incompetent people are so often promoted at the expense of their more competent peers. “People in organizations are very easily swayed by the trust of others, even when that trust is unwarranted,” says Anderson. “Shows of confidence are of outsized importance.”
Studies suggest that organizations would benefit from taking the trust of individuals with a grain of salt. Yes, confidence can be a sign of a person’s real abilities, but it’s often not a very good sign. Many individuals are confident in their abilities even though they lack true skills or competencies.
The authors conducted six experiments to measure why people become overconfident and how overconfidence equates to a rise in social stature. For example:
In Study 2, researchers looked at 242 MBA students in their project teams and asked them to go through a list of historical names, historical events, books, and poems, then identify which ones they knew. or recognized. Terms included Maximilien Robespierre, Lusitania, Wounded Knee, Pygmalion, and Doctor Faustus. Unbeknownst to the participants, some names were invented. These so-called “foils” included Bonnie Prince Lorenzo, Queen Shaddock, Galileo Lovano, Murphy’s Last Ride and Windemere Wild. The researchers felt that those who chose the most foils were the most confident because they believed they were more knowledgeable than they actually were. In a survey at the end of the semester, these same overconfident individuals (who reported recognizing the most foils) achieved the highest social status within their groups.
It’s important to note that the band members didn’t think their high-ranking peers were overconfident, just that they were great. “That overconfidence didn’t come across as narcissistic,” Anderson says. “The most confident people were seen as the most loved.”
Study 4 set out to find out the kinds of behaviors that make overconfident people seem so wonderful (even when they weren’t). Behaviors such as body language, vocal tone, turnouts were captured on video as the groups worked together in a lab. These videos revealed that overconfident individuals spoke more often, spoke with a confident vocal tone, provided more information and responses, and acted calm and relaxed when working with their peers. In fact, overconfident individuals were more convincing in their demonstrations of ability than individuals who were actually very competent.
“These great attendees weren’t obnoxious, they didn’t say, ‘I’m really good at this. Instead, their behavior was much more subtle. They just participated more and were more comfortable with the task, even if they were no more competent than anyone else,” says Anderson.
Two recent studies revealed that it is the “desire” for status that encourages people to be more confident. For example, in Study 6, participants read one of two stories and were asked to imagine themselves as the protagonist of the story. The first story was a simple, bland tale of losing and then finding your keys. The second story asked the reader to imagine finding a new job at a prestigious company. The job offered many opportunities for higher status, including promotion, a bonus, and a fast track to the top. Participants who read the New Job script rated their desire for status significantly higher than those who read the Lost Keys story.
After completing the reading, participants were asked to rate themselves on a number of skills such as critical thinking, intelligence and the ability to work in a team. Those who had read the new job story (which boosted their desire for status) rated their skills and talent much higher than the first group. Their desire for status amplified their overconfidence.
Decreasing the natural tendency to overconfidence can be difficult, but Professor Anderson hopes this research will inspire people to look for more objective cues of ability and merit in others, instead of overstating unfounded confidence. .