EV-0041
Three different ways of being sure you are right
Moore, D. A., & Healy, P. J. (2008). Psychological Review, 115(2), 502-517 · Source
What this entitles us to say
A theoretical and empirical paper separating overconfidence into three distinct phenomena - overestimation of your own performance, overplacement relative to others, and overprecision in your beliefs - and finding that overprecision, excessive faith that you know the truth, is the most persistent.
What it found
Three distinct phenomena had been traveling under one name:
- Overestimation - thinking you performed better than you did. - Overplacement - thinking you performed better than others did. - Overprecision - excessive faith that you know the truth.
The pattern reverses by task difficulty: on difficult tasks people overestimate their own performance while wrongly believing they are worse than others; on easy tasks they underestimate their own performance while wrongly believing they are better. Overprecision appears more persistent than either of the other two.
Why it matters here
Better data gives you a better chance of making a better decision - the revised principle for this trait. This entry names what stops a leader going to get the data: not vanity, but overprecision. Someone who is already certain has no reason to look further. That is the trait's real opponent, and it is more teachable than "arrogance" because it is specific.
The difficulty reversal is directly useful to the assessment build. Self-rating error is not a constant upward bias - it flips depending on how hard the thing being rated is. A leader rating themselves on something genuinely difficult may well rate themselves below where their people rate them. The report language should not assume every self-other gap points the same way, and the 360 comparison should be built expecting both directions.
The limits
Much of the underlying evidence is laboratory judgment tasks rather than executive decisions. The paper's central contribution is conceptual - separating three things that had been conflated - and conceptual contributions should be cited for structure rather than for effect sizes. Verified to abstract level.
What we do not say
any quantified claim about how overconfident executives are. This is a conceptual paper resting largely on laboratory judgment tasks.