Cheap Talk and Credibility : The Consequences of Confidence and Accuracy on Advisor Credibility and Persuasiveness

Is it possible to increase one's influence simply by behaving more confidently? Prior research presents two competing hypotheses: (1) the confidence heuristic holds that more confidence increases credibility and (2) the calibration hypothesis asserts that overconfidence will backfire when others find out. Study 1 reveals, consistent with the calibration hypothesis, that while accurate advisors benefit from displaying confidence, confident but inaccurate advisors received the lowest ratings of credibility. Furthermore, when an advisor's inaccuracy is revealed, it is difficult for these advisors to recover from their lost credibility. But Study 2 shows that when feedback on advisor accuracy is unavailable or costly, confident advisors hold sway regardless of accuracy. In other words, the confidence heuristic prevails when accuracy is difficult to determine. However, people also made less effort to determine the accuracy of confident advisors; interest in buying advisor performance data decreased as the advisor's confidence went up