Most of us have displayed overconfidence at one point or another. It’s not to say that this is an entirely bad thing. Overconfidence gives us agency over our opinions, ideas and thoughts.

But too much of anything can be harmful. Similarly, too much overconfidence can be excessive and detrimental.

Oscar Wilde wrote, “everything in moderation, including moderation.” So, let’s explore the overconfidence bias and how moderation can help you curb this bias in the workplace.

  1. Definition Of Overconfidence Bias

  2. Overconfidence Bias In Decision-Making

  3. How To Avoid Overconfidence Bias

Definition Of Overconfidence Bias

Overconfidence bias defines a situation where what you choose to believe is greater than the truth. When you start to rely on your own estimations and ideas of things rather than facts, you exhibit an overconfidence bias.

You can be overconfident about your skills, abilities or even knowledge. Think about how we share the news today. From WhatsApp forwards to Twitter, there’s no one line of thought that we follow. It’s all tinted with personal opinions and an unwavering belief that what we think is the truth. This belief stems from an overconfidence bias. We’re more likely to form an opinion based on our existing knowledge than the truth.

In the workplace, overconfidence bias can lead to significant losses. As responsible employees, it’s important to keep a check on how you approach a problem, develop strategies and work with others.

Overconfidence Bias In Decision-Making

In the study of cognitive biases, the overconfidence bias is one of the most potent and common biases to exist. It has a significant impact in decision making because how we think about things determines our actions.

Here are some examples of overconfidence bias in decision-making.

  1. Say you estimated your sales turnover at 20% even though the projected revenue based on calculations doesn’t exceed 15%. You decide to go ahead with this figure and all subsequent decisions depend on it. Not only does this lead to poor strategizing but also affects key stakeholders involved.

  2. Imagine that you work in the product team and without informing your manager, you contact your client about implementing certain changes. You have a good rapport with your manager so you assume they’ll be fine with it. But as you soon find out, going over their head wasn’t the best idea.

The overconfidence bias can be divided into three key aspects based on existing literature on the topic:

  1. Overprecision

Overprecision explains your unfaltering confidence that you know the truth or the precise knowledge you need for a certain decision.

  1. Overestimation

Overestimating your abilities is one of the most common results of an overconfidence bias.

  1. Overplacement

Overplacement is the notion that you have more authority than you actually do.

How To Avoid Overconfidence Bias

There are several examples of overconfidence bias that we deal with every day—misjudging your ability to finish your work on time, not following instructions or not being aware of your personal bias against people. So, it’s even more important to learn how to overcome your bias for decision-making.

The Harappa PRISM mindset is a helpful approach to overcoming your biases.

  1. Process

Rather than fixating on what you already know, try to follow a process with defined steps to approach the problem objectively. Not only will this help you move past your instincts but also analyze the decision from a technical perspective.

  1. Reflection

Reflection is when you take a step back to look at things with an outside-in approach. It may be difficult at first, but reflection can help you question your decisions. It’s a critical skill for leaders and decision-makers.

  1. Information

Gathering as much information as possible about a problem before proceeding with finding solutions can help you overcome your bias. Your willingness to learn and discover more about something is a step toward objective thinking.

  1. Skepticism

Never take your assumptions at face value and practice self-restraint. Being skeptical isn’t always a bad thing, especially if you’re trying to overcome your biases. Questioning things and challenging yourself is a great way to discover new paths.

  1. Multiple Perspectives

When you’re working in a team and the decisions impact everyone, you should consider multiple perspectives. Not only will this give you a chance to address your biases but also account for different opinions and ideas.

Your overconfidence bias may be doing you more harm than good. So, it’s important to identify and overcome this bias to make better decisions. Harappa’s Making Decisions course will teach you ways to reflect and consider multiple perspectives before arriving at a decision. Combat uncertainty and peer pressure with useful hacks and important frameworks like the PRISM framework.


Explore topics such as Decision-MakingTypes of Decision-MakingStrategic Decision-Making, Common Decision-Making Biases & Selection Bias from Harappa Diaries and learn to make decisions without any personal bias.

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