Why the Confident Don't Bet
By Bryan Caplan
The world is full of confident people. Despite their confidence, it’s usually hard to make them bet on their beliefs – and even harder to make them bet at worse-than-even odds. In one of my all-time-favorite posts by Robin Hanson, he indirectly suggests an intriguing explanation: “confident” has two distinct meanings.
The first is simply assigning a high probability to your beliefs. The second, in contrast, is all about status. Robin:
Consider some uses of the word “confident“:
Tom is confident the bus will arrive soon.
This is often interpreted as Tom assigning a high probability to the bus arriving soon. But then what about:
The CDC is confident this diseases poses only a moderate risk.
Sam took me into his confidence.
Perhaps this means Sam assigned a high probability that I would not betray him. But then what about:
Bill’s manner is more confident these days.
Perhaps this means Bill assigns a high probability to his having a
high ability. But this last usage seems to me better interpreted as
Bill acting higher status, and expecting his bid for higher status to
be accepted by others. Bill does not expect to be challenged in this
bid, and beaten down.
If you ever offer advice, to someone who asks you how confident you
are in your advice, try to remember that this may at root not be a
question about probabilities. It may instead be a question what can
happen socially if your advisee follows your advice. How easily might
others might challenge that advice, perhaps then lowering your
advisee’s status? To figure that out, you may need to look beyond
probabilities and analysis robustness, and consider who might want to
challenge this advice, what might make them want to launch such a
challenge, and what resources they might bring to such a fight.
Is Robin right? How confident are you in your judgment? And just to be meta, what kind of confidence are you talking about?