Example of Illusion of Validity
- A hiring manager is confident they can identify the best candidates through interviews, despite research showing that unstructured interviews have poor predictive validity for job performance.
The coherent impression formed during interviews creates false confidence in prediction accuracy. - A financial advisor believes they can predict market movements based on pattern recognition, even though their track record is no better than random chance.
The consistent narrative constructed from market data creates unwarranted confidence.
Note
Described by Daniel Kahneman in "Thinking, Fast and Slow" as one of the most personally significant cognitive biases he encountered in his research career.
