  Confidence is an essential ingredient of success in a wide range of domains
ranging from job performance and mental health, to sports, business, and
combat. Some authors have suggested that not just confidence but
overconfidence-believing you are better than you are in reality-is advantageous
because it serves to increase ambition, morale, resolve, persistence, or the
credibility of bluffing, generating a self-fulfilling prophecy in which
exaggerated confidence actually increases the probability of success. However,
overconfidence also leads to faulty assessments, unrealistic expectations, and
hazardous decisions, so it remains a puzzle how such a false belief could
evolve or remain stable in a population of competing strategies that include
accurate, unbiased beliefs. Here, we present an evolutionary model showing
that, counter-intuitively, overconfidence maximizes individual fitness and
populations will tend to become overconfident, as long as benefits from
contested resources are sufficiently large compared to the cost of competition.
In contrast, "rational" unbiased strategies are only stable under limited
conditions. The fact that overconfident populations are evolutionarily stable
in a wide range of environments may help to explain why overconfidence remains
prevalent today, even if it contributes to hubris, market bubbles, financial
collapses, policy failures, disasters, and costly wars.
