Overconfidence effect in the context of "Subjective probability"

Estimation (or estimating) is the process of finding an estimate or approximation, which is a value that is usable for some purpose even if input data may be incomplete, uncertain, or unstable. The value is nonetheless usable because it is derived from the best information available. Typically, estimation involves "using the value of a statistic derived from a sample to estimate the value of a corresponding population parameter". The sample provides information that can be projected, through various formal or informal processes, to determine a range most likely to describe the missing information. An estimate that turns out to be incorrect will be an overestimate if the estimate exceeds the actual result and an underestimate if the estimate falls short of the actual result.

The confidence in an estimate is quantified as a confidence interval, the likelihood that the estimate is in a certain range. Human estimators systematically suffer from overconfidence, believing that their estimates are more accurate than they actually are.

In psychology, the false consensus effect, also known as consensus bias, is a pervasive cognitive bias that causes people to overestimate the extent to which other people share their beliefs and views; it is the tendency to "see their own behavioral choices and judgments as relatively common and appropriate to existing circumstances". In other words, they assume that their personal qualities, characteristics, beliefs, and actions are relatively widespread through the general population.

This false consensus is significant because it increases self-esteem (overconfidence effect). This bias is especially prevalent in group settings where one thinks the collective opinion of their own group matches that of the larger population. Since the members of a group reach a consensus and rarely encounter those who dispute it, they tend to believe that everybody thinks the same way. The false-consensus effect is not restricted to cases where people believe that their values are shared by the majority, but it still manifests as an overestimate of the extent of their belief. Additionally, when confronted with evidence that a consensus does not exist, people often assume that those who do not agree with them are defective in some way.