Overconfidence

Overconfidence by experts resulting in disastrous decisions was the theme of a recent presentation by Malcolm Gladwell, and it has obvious implications for the insurance industry. He pointed to the crisis in the financial industry, Wall Street in particular, as the prime example of overconfident experts getting it wrong, and talked a bit about the demise of Bear Stearns. Gladwell used a number of other examples to support his thesis, including a study on the change in outcomes when experts...