Overconfidence and Dunning-Kruger effect

People are typically overconfident. They tend to overestimate their abilities in all kinds of areas, ranging from sense of humor, grammar, reasoning skills, to driving skills. Interestingly, this effect is most pronounced among people who have the least skill. Those with a test score in the 12th percentile would on average estimate themselves to be in the 62nd percentile. The Optimism Bias by Tali Sharot gives a lot of examples and corresponding explanation for this prevalent phenomenon of overconfidence, claiming that our brains are irrationally optimistic.

One of my favorite academic papers is The Trouble with Overconfidence by Don Moore and Paul Healy, published in Psychological Review in 2008. They use Bayesian updating to show that even under the assumption of rationality, this phenomenon of overconfidence can appear.

"After experiencing a task, people often have imperfect information about their own performances but even worse information about the performances of others. As a result, people’s post-task estimates of themselves are regressive, and their estimates of others are even more regressive."

Rephrase their conclusion in plain English: when a task is easy, people underestimate their performance but underestimate the performance of others even more, so they think they perform better than others do. When trying to finish a difficult task, however, people overestimate how well they perform but overestimate even more how others perform, so they think others perform better than they do.

Social Influence and Social Value

Human beings are social animals, and it is important to us how others perceive us. The clothes we wear, the cars we drive, the houses we live, all potentially influences how other people see us. So aside from their physical and practical values, clothes, cars, and houses all have social values, which make us willing to buy something at a price much greater than its utilitarian value. Even what we talk about, aside from the value of communicating information, has social value that influences how others perceive us. So we talk about cool things, we tell jokes, we gossip, not so much for communication as to appear interesting, smart, and knowledgeable, showing our good qualities as potential friends, mates or business partner.. Things that have social values provide visible symbols of social status.

It is interesting to think that while most people choose to talk cool stuff, which bring social value to the "talkers," what most people talk about determines what kind of products or what type of consumption have high social values. When most people talk about a certain product, owning that product bring the owner the attention and social status. Information spread under the disguise a random chat.

The consumption of all social products exhibits positional externality. Well, that is a confusing economic phrase, but to put it a simple way, it means that your consumption of some social product incurs social cost to other people. Here I emphasize the term "social" because the practical value is unaffected. Consider the example of houses. When you have a reasonable-size house while all your neighbors have tiny houses, then you feel good about yourself, which comes from the value of your social standing. You feel good maybe you your neighbors talk a lot about you, like how rich you are, how high your salary must be, how comfortable your life must be in such a "big" house compared to their little tiny ones. Now put your house into a neighborhood where all your neighbors have spacious houses. You feel sad, upset and to some extent depressed. You are out of the focal point of attention now. Your neighbors stop talking about you, or worse, they talk about bad things, like how bad your financial condition must be, how terrible for you to live in such a "small" house, etc. Your physical living condition is the same, but your social standing makes you feel drastically different in these two situations. That explains why we may want to be a big frog in a small pond rather than a small frog in a big pond (c.f. Choosing the Right Pond by Robert Frank).

Notice that the consumption of social value is a zero-sum game. When everyone increases the size of their houses, the social values of the houses don't change that much, though the practical values increase. This will give rise to welfare loss as we over-allocate our resources to consumption that brings social value, while the social value remains unchanged, the marginal practical value keeps decreasing, even to a level we cannot feel the increase of the practical value. Now you should understand why after we have a dramatic increase in our living condition compared to our past, we don't feel any happier. You should also understand why the GDP difference is not a good predictor of happiness: while the United States has a much higher GDP per capita than the Philippines, the Americans are not much happier than the Filipinos (indeed, the Americans are much less happy than the Filipinos according to many happiness indices).

So the lesson? Paying too much attention to the consumption of social goods is a recipe for sadness. But when you compare yourself with others, don't blame anyone. It is our nature as social animals. Evolution has made us that way, and it was advantageous in the hunter-gather society when social connection and cooperation is important and even a matter of life and death. We are hence wired to care about what others think about us, and a consequence of this is our preferences for social standing. It is not a bad thing, but if you want to be happier, you probably need to care less about others' opinions. What should we do then? Maybe first be aware of this, and realize that missing a train in painful only if you run after it (a quote from the book The Black Swan by Nassim Nicholas Taleb), and failing to achieve the success that others expect is painful if you chase after it.

The bottom line: Be yourself. Know who you are and what you want, not who others want you to be or what most people want.

Why the gene for suicide?

It is a puzzle why evolution doesn't eliminate the gene that gives people propensity to commit suicide, because if someone has this "suicide" gene and does commit suicide, this gene would not pass on. Natural selection should have selected against that gene, but as we can see, natural selection is not that successful in doing this. We can see some suicidal or nearly suicidal behaviors among animals, which can be explained by kin selection: when your suicidal behavior benefit your close relatives, then it may be helpful to pass on the copy of genes on your relatives, which are the same as yours. The suicidal behavior of human, however, seldom benefit their kin, and hence cannot be explained by kin selection.

To solve this puzzle, it is helpful to realize that not every characteristic of human being is selected directly by natural selection. Sometimes they are just by-products of other characteristics. I would argue that suicidal behavior and its major cause depression are by-products of the human desire to be significant and to have a purpose. This desire to be significant is a major driving force for human, which can bring them more resources and more mating opportunities. When we fail to achieve what we planned, we feel sad. This bad feeling motivates us to try harder. This close to perfect design in the hunter-gatherer society, however, is flawed in modern society. We now live in a time where there are tons of situations that can put us into stress, tons of reasons for us to get disappointed and the fast paced living keeps us from recovering from the stress and disappointment, hence depression develops. As suicides are almost unheard of in primitive societies, we can say that human suicidal behavior is a product of the mal-adaptation of our genes to modern environment.

Evolution and the Prefrontal Cortex

More than 2000 years ago, Confucius said "the desire for food and sex is human nature." From an evolutionary point of view, food and sex are not just human nature, but the nature of every animals. In a general sense, survival and reproduction are the driving force of all living organisms.

What, then, distinguish human from other animals and living organisms? In a word, prefrontal cortex (PFC). PFC is the anterior part of frontal lobe, and it is responsible for planning, decision making, and moderating social behavior. The prefrontal cortex makes up far larger percentage of the brain compared to other animals.

Having a prefrontal cortex is a blessing and a curse. This reminds me of these words from Spider Man: with great power, comes great responsibility. It is a blessing because it enables human to think, to plan, to reason, to imagine, to visualize, to discover and resolve conflicts. With this ability, human start to have dominion over the earth. The prefrontal cortex, however, is also a curse because concomitant with the ability to think and plan is the potential to worry and be anxious about the future. Of course, without the motivating feeling of being worried about the future, the prefrontal cortex would be of no use because people may simply not to use it. But the feeling of worry and anxiety, however, at the same time put stress on human mind and body, and when the feeling is too strong and last too long, it does harm to human both mentally and physically. So the prefrontal cortex develops this ability of self-deception to reduce cognitive dissonance and make human feel better, preventing the harm done by anxiety. It reminds me the tragic ending in Shutter Island where Teddy has to be lobotomized to get rid of his self-deception and illusive imagination.

Interestingly, when people are nervous and anxious, they activate the alarm system built in their brain, which prompted a complex change in brain chemicals that inhibit the functioning of the prefrontal cortex. They temporarily shut down their prefrontal cortex, which is like they have a temporary lobotomy! Believe it or not, this is an advantage in a life-or-death situation. The shutting down of people's profrontal cortex rid off their ability of thinking, and they instead depend more on their instinct, getting ready in an impulsive fight-or-flight state. Consider back in the Pleistocene, you are hunting your dinner somewhere in the savanna and suddenly you spot a tiger eyeing you. What do you do? I don't know what you think, but your brain think it's better to make sure you act quickly with every ounce of energy you have. Your brain think it's better not to let you think. This fight-or-flight response wants is an energy-management instinct, direct you to spend your limited physical and mental energy in an efficient way.

The problem is this once advantageous design back in the hunter-gatherer society is not adaptable to modern society, as there are few life-and-death situations. When we under pressure, we feel nervous, and our instinct mistakenly takes current situations like taking an exam or giving a public speech as life threatening, shuts down our thinking and reasoning ability, and get us ready to engage in a fight or a flight. There are also physiological changes corresponding to this feeling of stress, which consume much more energy much more quickly than common situations. Constant stress, as we can easily see here, gives you a feeling of burning down. It is actually true, because your body burns a lot of energy. This condition if lasting long will be detrimental to your health.

59 seconds by Richard Wiseman

Effective change does not have to be time-consuming. It can take less than a minute and is often simply a question of knowing exactly where to tap.

1. Happiness
Keep the perfect diary.
Buy experiences, not goods.
Sit up.

2. Persuasion
The Franklin Effect: People like you more when they do a (SMALL) favor for you.
The Pratfall effect: The occasional slipup can enhance your likeability when you are in danger of being seen as too perfect.
Gossip: Whatever traits you assign to others are likely to come home to roost, being viewed as part of your own personality.

If  you want to up the chances of a lost wallet being returned, truck in a photograph of the cutest, happiest baby you can find and make sure that it is prominently displayed.

3. Motivation
Lien Pham and Shelley Taylor: The daydreaming exercise had significant impact on the students' behavior, causing them to study less and make lower grades on the exam.
Gabriel Oettingen and Thomas Wadden:  those with more positive fantasies had lost on average twenty-six ponds less than those with negative fantasies.

You need to take actions! Fantasizing about your perfect world may make you feel better, but it is unlikely to help you transform your dreams into reality. It is important to visualize, but it is no less important to take actions!

Hence, visualize yourself doing, not achieving. Visualize yourself taking the practical steps needed to achieve your goals.Also, visualize yourself as others see you.

Tennis players and golfers benefit far more from imagining themselves training than winning.

Lisa Libby: they type of "behavioral commitments" involved in such visualization exercises can be made even more effective by seeing yourself as others see you.

Permanent and positive changes are all about having the perfect plan, knowing how to beat procrastination, and employing a rather strange form of doublethink (fantasy-reality thinking).

1. Make a step-by-step plan
Successful people break their overall goal into a series of sub-goals and thereby created a step-by-step process that helped remove the fear and hesitation often associated with trying to achieve a major life change. These plans were especially powerful when the sub-goals were concrete, measurable, and time-based
SMART: specific, measurable, attainable, relevant, time-based.
2. Think about the good things that will happen if I achieve my goal
remind yourself frequently of the benefits accosicated with achieving the goals. Have an objectice checklist of how life would be better once the goals are achieved.
3. Reward for making progress toward the goal
Some small reward attached to the sub-goals.
4. Record my progress (in a journal or on a chart)
Make the plans, progress, benefits, and rewards as concrete as possible by expressing them in writing. The act of writing, typing, or drawing significantly boost the chances of success.



Using the Zeigarnik effect to solve the problem of procrastination.
"Just a few minutes" rule is a highly effective way of beating procratination and could help people finish the most arduous of tasks.



Consider your legacy and write your own eulogy. This helps to identify long-term goals and assess the degree to which you are progressing toward making those goals a reality.


Liars tend to lack detail, use more "ums" and "ahs" and avoid self-references ("me,""mine,""I"), use uncontracted form (do not instead of don't).
People are about 20 percent less likely to lie in an email than in a telephone call.