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The New York Times Economix blog reports Malcolm Gladwell’s thoughts on confidence.

… the financial crisis was not due to incompetence or regulatory failure, but psychological failure — the fact that bankers were overconfident.

Gladwell compares the financial crisis to the Gallipoli Campaign - although, as a commenter notes, he could have just as easily used Hitler or Napoleon’s doomed assaults on Russia.

Interestingly, Gladwell seems to think that confidence invariably leads to overconfidence:

“Incompetence is certainty in the absence of expertise,” he said. “Overconfidence is certainty in the presence of expertise.”

In fact, he suggests that overconfidence may well be an evolutionary trait:

… because appearing “bigger and stronger” than you really are keeps you from being attacked. And the people most likely to appear “bigger and stronger” than they really are tend to be the ones who have “miscalibrated” beliefs that they really are bigger and stronger than they really are.

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