This phenomenon, known as overconfidence, is widespread and robust. Overconfidence has been confirmed even when it is in the best interest of the research subjects to be well-calibrated. When these conditions are not satisfied, overconfidence should be expected, for both experts and non-experts. Most people' s beliefs are biased in the direction of optimism. Many of them must be mistaken.
Optimists also underestimate the likelihood of bad outcomes over which they have no control.
They tend to underestimate the role of chance in human affairs and to misperceive games of chance as games of skill. The combination of overconfidence and optimism is a potent brew, which causes people to overestimate their knowledge, underestimate risks and exaggerate their ability to control events. Hindsight Psychological evidence indicates that people can rarely reconstruct, after the fact, what they thought about the probability of an event before it occurred. Most are honestly deceived when they exaggerate their earlier estimate of the probability that the event would occur. This is one of the manifestations of a collection of hindsight biases.