The gap between experts' confidence and the accuracy of their forecasts

Decision-Making

Philip Tetlock has done one of the most comprehensive studies of forecasters, their accuracy, and their excuses. When studying experts’ views on a wide range of world political events over a decade, he found that, across the vast array of predictions, experts who reported they had 80 percent or more confidence in their predictions were actually correct only around 45 percent of the time. Across all predictors, the experts were little better than coin tossers.

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The Little Book of Behavioral Investing: How not to be your own worst enemy

James Montier

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The Little Book of Behavioral Investing: How not to be your own worst enemy

by James Montier

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Behavioural principles

Behavioural ideas at play in this post

Short, plain-English explanations of the principles behind this post, with links to related books and examples in the archive.

Authority bias

We give extra weight to expert or high-status opinions, even when they may be wrong.

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Overconfidence effect

We are often more certain than the evidence really allows.

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Base-rate neglect

We focus on vivid specifics and ignore the wider statistical odds.

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The gap between experts' confidence and the accuracy of their forecasts

Behavioural ideas at play in this post

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