Watch for
High confidence in predictions based on narrative coherence rather than track records.
Belief & ConfidenceBias #111
Illusion of Validity
Confidence in predictions does not mean accuracy.
The tendency to overestimate the accuracy of future predictions when they are built on a coherent narrative even if supported by poor data.
Why it matters: Kahneman observed this in his own work as a financial advisor. A key concept in Thinking Fast and Slow.
Try this
Keep a prediction log and measure your calibration over time.
Real-world example
A financial analyst confidently predicts market movements based on a compelling story while ignoring low predictive validity.
Key researchers
Daniel Kahneman
First described in 2011
Psychological mechanism
Narrative coherence substituting for statistical validity. A story that makes sense creates subjective confidence. But confidence reflects narrative quality not predictive accuracy.
Seminal research
Daniel Kahneman (2011), "Thinking Fast and Slow."
Related Biases
Debrief
Biases are not character flaws. They are recurring patterns in how minds compress uncertainty, save energy, and narrate reality. Once you recognise the pattern, you can slow the decision down, test the assumption, and make space for a better explanation.
Sources
EducationalAPA Dictionary entry