There are some interesting links contained in this short post on the NYTimes.com’s Freakonomics blog about why certain (i.e., most) economists have been so wrong about so much lately — and why we continue to listen to (or even care) what they say despite such proven ineptitude.
One link goes to an article about a recent study on why we continue to believe that failed-pundits (like all the economists who missed the economic downturn) know what the hell they are talking about (i.e., when they continue to predict the future despite being wrong continuously). According to the study, “humans prefer cockiness to expertise.”
“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…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. And it spells bad news for scientists who try to be honest about gaps in their knowledge.
OK. So we listen to the loudest cocky voices who sound like they know what they are talking about, despite being wrong a lot of the time?
I don’t know why, but that reminds me of the technology blogosphere.
(Sidenote: This makes me recall a post from a few years ago that pointed to this Wall Street Journal column by Carl Bialik about why “the prognostications of political pundits are about as accurate as a chimp throwing darts.” Despite their sub-chimp performance, we still listen to failed political pundits, also. I feel certain the “cockiness rule” plays well on that field, also.)