Confidence Quote by Daniel Kahneman
““Social psychology comes into the picture here, because the answer that a truthful CFO would offer is plainly ridiculous. A CFO who informs his colleagues that “there is a good chance that the S&P returns will be between –10% and +30%” can expect to be laughed out of the room. The wide confidence interval is a confession of ignorance, which is not socially acceptable for someone who is paid to be knowledgeable in financial matters.””
About This Quote
Source Speech: Interview on behavioral economics, 2013
A CFO giving a very wide forecast reveals ignorance, which is socially unacceptable for a financial expert.
In simple terms: Broad forecasts expose lack of knowledge and damage credibility.
Key Takeaway
Avoid vague predictions; be precise.
Themes
credibility
communication
finance
Mood
anervous
critical
Type
advice
analytical
When to use this quote
- board meetings
- financial reporting
- investment decisions
Key Concepts
behavioral economics
risk perception
Questions to Reflect On
- How can experts balance honesty with confidence?
- What alternatives exist to convey uncertainty?
A Different Perspective
Overly precise forecasts may mislead stakeholders.
