Besides all the errors we have seen so far, humans seem to have an innate ability to believe they are in control, even when that is not true, nor even possible. In 1975, Langer and Roth tested people on whether they felt they would be able to predict the outcome of random coin tosses. They rigged the outcome in such way that all participants would get the same number of correct guesses. The main difference was that the order of the correct outcomes was different, with three groups. For some of the subjects, those correct predictions would happen more often at their first attempts; the second group experienced a stable rate of success; and the third group started getting more wrong answers at first and more correct ones at the end. Consistent with the primacy effect, those who had obtained their correct answers sooner considered themselves more skilled than those who had observed more correct answers later. That was despite the fact the percentage of hits was the same for all involved. The confidence on their skills was not related with how successful they had been in the overall task, but just with how well they had performed in the beginning.
However, not everyone who participated in the experiment was asked to make predictions. A number of people were just instructed to observe the ones who were making the predictions and evaluate their skill at the task. Those who just observed evaluated the overall skill of the guessers as worse than the guessers evaluated themselves. Being in control had an effect on how people seemed to report the skill.
Interestingly, despite being clear the subjects had no influence on the outcome, those people who felt they were more skilled at predicting the outcomes would, after a while, start attributing their correct answers to their ability, while the wrong ones were blamed on chance (Anyone who has taught courses and graded the exams of their students can probably observe this effect. Many students seem to honestly (and absurdly) believe in the combination that any success in the classroom is due to their merit, while failures are to blame on the teacher, or study conditions, anything but themselves). And their false belief in their merit extend to how they evaluated different aspects of the problem. Both guessers and observers assumed that, if the guesser had the opportunity to train for that task, he would improve his performance. And they seriously felt that the existence of distractions would cause them to obtain a smaller number of correct results.
This illusion that we have some degree of control even when the task is completely random has been observed in several different tasks since these results. Pronin et al observed how this illusion of control is related to magical thinking, by making people actually believe that they have harmed others through a voodoo hex, especially when they have harboured evil thoughts about the victim or that they could influence the outcome of a basketball game by positive visualizations of their success (t should be unnecessary to say both effects are completely false, but unfortunately, this comment is very much needed). And, while failure at predicting sport events might be, for most people (except, of course, for betters), the same illusion can serious consequences in other areas. Some of those consequences might even be positive, since being in control can be related with feeling better. But this can also lead to bad decisions in all areas of human enterprise. For example, Odean discusses the consequences on the behaviour of prices of the fact traders are overconfident about their abilities and the control they actually have on the outcome of their investments. And I have often observed (and I am sure most readers have also) how people believe that their actions, sometimes just their intent, would actually influence outcomes that are mostly random.
But do not despair yet, dear reader. While the number of studies that show our mistakes is staggering, I believe I have been able to convince many of you of how we can not trust our own intuitions(and such a belief is almost certainly my own illusion of control that I have more influence on how you think than I actually have). As such, we will proceed now to more optimistic waters, first taking a cursory view on the explanations of why it is possible that we are so incompetent (we are not really incompetent, we are just far less competent than we would like to believe). And later ahead, we will ask the important question of how we can actually do better and try to avoid the many pitfalls our brains have in store for us.
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