The initial perception of overconfidence is that risks are bigger than they actually are.
In three different approaches, overconfidence has been researched. Overestimating yourself is believing that you are superior to yourself. Overplacement is an extreme sense of superiority toward others. Overconfidence in your knowledge of reality is known as over precision.
The tendency to have an inaccurate and deceptive opinion of our abilities, intelligence, or talent is known as overconfidence bias. It is, in essence, an egocentric idea that we are superior to what we truly are. It can be a risky bias, and behavioral finance and the financial markets are rife with it.
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