Over confident people can fool others into believing they are more talented than they actually are, a study has found.
These 'self-deceived' individuals could be more likely to get promotions and reach influential positions in banks and other organisations. And these people are more likely to overestimate other people's abilities and take greater risks, possibly creating problems for their organisations.
The study by researchers from Newcastle University and the University of Exeter, has also found that those who are under confident in their own abilities are viewed as less able by their colleagues.
The findings, which will be published in the journal PLOS ONE today, are the first time a link has been found between a person's view of their own ability and how others see their abilities, and could partially explain financial collapses and other disasters.
As part of the research the team asked 72 students to rate their own ability and the ability of their peers after the first day of their course. Of those, 32 students (about 45%) were under confident in their ability as compared to their final mark, 29 students (40%) were overconfident and 11 students (15%) were accurate in their assessments of their own ability.
There was a positive correlation between the grades students predicted for themselves and the grades others predicted for them. In other words, students who predicted higher grades for themselves were predicted to have higher grades by others, irrespective of their actual final score. The same applied to those who were under confident.
The task was repeated after six weeks of the course when the students knew each other better and the findings remained the same. Those who were over confident were over rated by others.
Study author Dr Vivek Nityananda, research associate at Newcastle University explains: "These findings suggest that people don't always reward the most accomplished individual but rather the most self-deceived.
"We think this supports an evolutionary theory of self-deception. It can be beneficial to have others believe you are better than you are and the best way to do this is to deceive yourself – which might be what we have evolved to do.
"This can cause problems as over confident people may also be more likely to take risks. So if too many people overrate themselves and deceive others about their abilities within organisations then this could lead to disastrous consequences such as airplane crashes or financial collapses."
Joint lead author, Dr Shakti Lamba, of The University of Exeter added: "If over confident people are more likely to be risk prone then by promoting them we may be creating institutions, such as banks and armies, that are more vulnerable to risk."