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Placeholder Lesson:
** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
Overconfidence bias is the tendency to overestimate one’s knowledge, abilities, or the accuracy of one’s predictions.
People affected by this bias often believe they are less likely to make mistakes than others.
This can lead to excessive risk-taking because individuals assume they have more control than they actually do.
In investing, it often results in too many trades or ignoring important information.
Overall, overconfidence skews judgment and leads to poor decision-making.