Marketplace Scratch Pad

It’s not what you say…

Scott Jagow Jun 11, 2009

Let’s say two people are constantly giving you advice. One of them is extremely confident every time but usually turns out to be wrong. The other is much less confident-sounding but usually winds up being right. Who do you listen to? A new study says overwhelmingly, people choose confidence first.

From New Scientist:

Ever wondered why the pundits who failed to predict the current economic crisis are still being paid for their opinions? It’s a consequence of the way human psychology works in a free market, according to a study of how people’s self-confidence affects the way others respond to their advice.

The research, by Don Moore of Carnegie Mellon University in Pittsburgh, Pennsylvania, shows that we prefer advice from a confident source, even to the point that we are willing to forgive a poor track record. Moore argues that in competitive situations, this can drive those offering advice to increasingly exaggerate how sure they are.

I think I’ve seen that show on one of the cable channels. Or maybe it was a Treasury Department press conference. I can’t recall.

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