Max Bazerman

So anytime that we've incurred these expenses for the opportunity to have this fight with the other side, we're ending up with a deal that's worse than what we could have had, had the two parties used reasonable negotiation procedures and reached a deal more efficiently.

Hmm.

It's a great question.

So my excellent colleague at the Haas School at Berkeley, Don Moore, I think of as the world's expert on appropriate confidence.

And he wrote a book called Perfectly Confident.

What Don finds is that when people are in domains where they lack competence,

they are even less confident than they should be.

But when people are in domains where they feel confident, they're even more confident than their skills and abilities should lead them to be.

So sometimes we don't need to.

If you're in a flea market and you're buying a souvenir for $15 and you make a mistake, no big problem.

And I would say, get on with life and don't worry about it.

If it's an important part of your work setting and you don't have the expertise, perhaps you need to buy it or borrow it from someone else in your firm or from an outside advisor.

So we need to understand when we...

No too little.

And we need to make up for our lack of personal expertise by relying on the expertise of someone else who we can trust.

Sure.

50 years ago, Kahneman and Tversky, well-known psychologists who created the field of behavioral economics in many ways, did an experiment where they basically asked people what percent of the countries in the United Nations were from Africa.

And they said, wait, before you give me your estimate, let's get an estimate from a roulette wheel.

And the roulette wheel either stops at 65 or 10.

And people are asked, is the number higher or lower than 10 or 65?