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Malcolm Gladwell has a long article in this week’s New Yorker on overconfidence. It doesn’t add much to the points he has already made, although it contains a lot of nice detail, particularly about Bear Stearns under Jimmy Cayne and Alan (Ace) Greenberg.

Gladwell gets a lot of criticism. Some of it is deserved. He’s also fine writer - precise and witty, with a good sense of timing. There are a couple of chuckle-out-loud lines in this piece.

It’s worth a read.

UPDATE: John Lanchester suggests why overconfidence may be particularly prevelant in financial fields:

Artists, sportsmen, surgeons, plumbers, and the rest of us have secret voices of doubt, inner reservations about ourselves, but if you go to work with money, and make money, you can be proved right in the most inhumanly pure way. This is why people who have succeeded in the world of money tend to have such a high opinion of themselves. And this is why they seem to regard themselves as paragons of rationality, while others often regard them as slightly nuts. The chairman and C.E.O. of Lehman Brothers, Richard Fuld, in his no-apologies testimony to a congressional committee after his company’s collapse, gave us a glimpse of this state of mind in its full pomp.

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