Overconfidence effect

The overconfidence effect refers to a cognitive bias where individuals overestimate their knowledge or abilities, particularly in areas like general knowledge. For example, someone might believe they are more knowledgeable about a topic than they actually are, leading them to give incorrect answers or take risks based on misplaced confidence. This phenomenon often arises because people tend to remember their successes more than their failures, which can distort their self-assessment. In essence, the overconfidence effect can lead to poor decision-making, as individuals may not recognize the limits of their understanding.