Fortune Favors the Bold

Abstract

This chapter examines the strategic role of overconfidence. It describes mentally healthy people that exhibit an overestimation of their capabilities, an illusion of control over events, and a perceived invulnerability to risk. It also describes overconfidence that has long been noted as a cause of disasters and wars, citing Geoffrey Blainey, Barbara Tuchman, and Stephen Van Evera who all blamed false optimism as one of the key causes of World War I. The chapter reviews the considerable discussion of the role of overconfidence in the contemporary world, such as the U.S. planning for the 2003 Iraq War and the 2008 financial crisis. It elaborates how overconfidence can offer adaptive advantages by increasing ambition, resolve, and perseverance.