Why the Confident Don't Bet

To answer all three; I'm not quite sure.

I always assess my confidence against the size of my position in the financial market. I was confident the euro was headed lower in the past couple of weeks, so I upped my bet massively. I was 100% confident, albeit without risking major capital destruction. Once I put the trade on, my confidence wavered....

When I'm not as confident, I take smaller positions or none at all.

If you ask me how confident I am about Europe going to hell in a hand basket, I'm very confident because the politicians and central bankers are exuding confidence and nothing else.

Female hypergamy: "I want a man who is confident."

How confident are you in your judgment? And just to be meta, what kind of confidence are you talking about?

If we are talking about the second form of confidence, isn't it all about how you act, not about your judgement? So your question is presuming we are talking about the first meaning.

And confidence in my judgement in what? On the whole, I'm pretty good at moving around the world without banging into things, though every now and then I turn out to be not as good at that as I thought.
I think it was Popper who gave a good response to this question about confidence in judgement. Say a mad scientist kidnapped a close friend of yours, and credibly threatened to kill them unless you told him the number of fingers on your left hand correctly. With so much resting on the stake, Poppper says, wouldn't you be likely to have a look at your left hand first, before making your statement? Even though it's something in which you are normally highly confident.

To take a bit more realistic example, I image that the people who do stunts like balancing a chair on a rope across the Grand Canyon with no safety net are more careful to check that the chair is sturdy beforehand, than when sitting down at a friend's perfectly normal table. Confidence is conditional on the downside risk you're taking.

As someone who has spent most of my adult life advising and making recommendations to senior decision-makers, the last point of Hanson's that you quoted strikes me as perceptive. In many cases, what decision-makers are looking for is justifiability in the event that the chosen course is called into question after the fact for whatever reason.

I often encounter business leaders who have 'great ideas' that they are 'sure will work' and would like 'the company' to try it out. When we suggest that they try it out within their own budget, they become a lot less confident in the idea.

As a senior decision-maker, I lol'd at David's post. What kind of world would it be if I didn't have to have a reason for a decision. I agree many folks "decide" what they want to do and then wrap good sounding rationalizations around the already made decision. I enjoy rationalization skewering. It doesn't make me popular, but I'd rather have the results than the admiration of rationizing "decision" makers.

As someone who has spent most of my adult life advising and making recommendations to senior decision-makers

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