Please guide me re the difference between illusion of Control Bais and Overconfidence Bias

Hi Memebrs,

Please guide me re the difference between illusion of Control Bais and Overconfidence Bias. I am strugling with difference and they seem similar to mee.

Kind Regards,

Illusion of control bias - individuals believe they have more control over outcomes than they actually do. Overconfidence bias - individuals are set in their ways due to overconfidence.

Overconfidence: someone’s subject confidence in his judgement is higher than his objective accuracy.

For example: when group of people are asked whether they are good drivers, more than 90 % respond that they are. In fact, only 40 % are. People generally tend to overerstimate their own abilities.

Ilussion of control: our subjective judgement on one particular ability, which is to control events !

For example, by investing in their employer’s company stock, people think they have somehow control on their investment (or on the stock performance) because they work for the company.

Several times I’ve taught a course in Problem Solving and Decision Making. As part of that course, I give the students a test: they’re to write down 90% confidence intervals for ten numbers that they probably don’t know. The numbers are, for example:

  • Martin Luther King’s age when he died
  • The gestation period of an Indian elephant
  • The diameter of the moon, in miles
  • The weight of an unloaded 747
  • and so on

I tell them to make sure that they give me 90% confidence intervals, not 100% confidence intervals (e.g., for the diameter of the moon, a range of 0 miles to 93 million miles would be a 100% confidence interval). Obviously, if they think that they know the number well, their interval will be narrow; if they think that they don’t know the number well, their interval will be wide.

If they’ve done this accurately, you would expect that the number of intervals that contain the actual number would be about 9 (= 90% of 10).

In fact, most individuals get 4 – 6 intervals containing the actual number: they’re obviously too confident in their skills at creating confidence intervals.

(What’s really interesting is that when I create intervals for the class – using the lowest minimum and the highest maximum for each interval – the actual numbers lie in those intervals usually only about 70% to 80% of the time: collectively, they’re still overconfident.)

Clearly, the students don’t believe that they have any control over the age at which Martin Luther King died.

That’s the difference.

Thank you (all of you) so much for your kind guidance. I was just confused by the consequences of these two which seem quite similar. Now it seem much clear to me.

Good wishes for exam success for all you there