Dan Gardner writes in Chapter 3 of his book Future Babble: “Overconfidence is a universal human trait closely related to an equally widespread phenomenon known as ‘optimism bias’.”
This overconfidence often leads us to assess our risks poorly. We all know about the captain of the Titanic who must have been extremely optimistic before that dreaded voyage. He probably thought: “Sure there are icebergs in the North Atlantic but I’ve never hit one in thirty years at sea. Of course I won’t hit one. Isn’t that why I was chosen to captain the greatest ship ever built? Isn’t this the reason why they honour me on this, my final voyage before my retirement?”
His overconfidence and optimism surely would have caused him to assess that Iceberg Risk before leaving on the voyage lower that it probably should have been.
Gardner also explains:
“Ask smokers about the risk of getting lung cancer from smoking and they’ll say it’s high. But their risk? Not so high. Starting a business? Most fail, but mine won’t. Getting married? Other people should have a prenuptial agreement. But not me, my love is forever.”
So don’t let your bias and overconfidence affect the way you assess your risks.