Overconfidence at work: Does overconfidence survive the checks and balances of organizational life?

Abstract

This review considers the role of overconfidence in organizational life, focusing on ways in which individual-level overconfidence manifests in organizations. The research reviewed offers a pessimistic assessment of the efficacy of either debiasing tools or organizational correctives, and identifies some important ways in which organizational dynamics are likely to exacerbate overconfidence among individuals. The organizational consequences of overconfidence can be substantial, especially when it comes from those at the top of the organization. However, there are also reasons to suspect that the research literature exaggerates the prevalence of overconfidence.