överestimering

Overestimering is a Swedish term that translates to overestimation in English. It refers to the act or tendency of assessing something, such as a value, quantity, or ability, as being greater than it actually is. This cognitive bias can manifest in various aspects of life, from personal judgments to professional evaluations.

In financial contexts, overestimering can lead to individuals or organizations investing more capital than is realistically warranted by the expected returns. This might occur due to overly optimistic projections or a failure to adequately account for potential risks and downsides. Similarly, in project management, overestimering of timelines or resources can result in delays and budget overruns.

Psychologically, overestimering can be linked to the Dunning-Kruger effect, where individuals with low competence in a particular area tend to overestimate their own abilities. Conversely, it can also affect those with high competence, leading them to underestimate the difficulty of tasks for others. Recognizing the propensity for overestimering is a crucial step in making more accurate and informed decisions. It involves actively seeking objective data, considering alternative perspectives, and practicing self-awareness regarding one's own biases. By consciously challenging initial assessments and seeking external validation, one can mitigate the negative consequences of overestimering.