Bluffing promotes overconfidence on social networks

Abstract

The overconfidence, a well-established bias, in fact leads to unrealistic expectations or faulty assessment. So it remains puzzling why such psychology of self-deception is stabilized in human society. To investigate this problem, we draw lessons from evolutionary game theory which provides a theoretical framework to address the subtleties of cooperation among selfish individuals. Here we propose a spatial resource competition model showing that, counter-intuitively, moderate values rather than large values of resource-to-cost ratio boost overconfidence level most effectively. In contrast to theoretical results in infinite well-mixed populations, network plays a role both as a "catalyst" and a "depressant" in the spreading of overconfidence, especially when resource-to-cost ratio is in a certain range. Moreover, when bluffing is taken into consideration, overconfidence evolves to a higher level to counteract its detrimental effect, which may well explain the prosperity of this "erroneous" psychology.