Power and Poor Decision-Making

A recent study sheds light on how power can fuel the overconfidence that causes people in leadership positions to make bad decisions.

Nathanael Fast, one of the study's co-authors, commented, “The aim of this research was to help power holders become conscious of one of the pitfalls leaders often fall prey to, The overall sense of control that comes with power tends to make people feel overconfident in their ability to make good decisions.”

The researchers conducted a number of experiments to explore this tendency. In one experiment, subjects were asked to bet money on the accuracy of their own knowledge. But first, participants were put in touch with feelings of either power or powerlessness by being asked to recall and write down accounts in some detail of a specific experience when they either had, or did not have, power over other people. Then the subjects were asked to answer six factual questions and to set a “confidence boundary” on how well they thought they had performed.

“What we found across the studies,” Fast commented, “is that power leads to over-precision, which is the tendency to overestimate the accuracy of personal knowledge.

The study found that subjects who were primed to feel powerful actually lost money betting on their knowledge while, those who did not feel powerful made less risky bets and did not lose money.

The best decision-makers can find ways to avoid this vulnerability:

“The most effective leaders bring people around them who critique them. As a power holder, the smartest thing you might ever do is bring people together who will inspect your thinking and who aren't afraid to challenge your ideas.” But, ironically, the study shows that the more powerful they become, the less help leaders think they need.

Adam Galinsky, another co-author, concluded “Power is an elixir, a self-esteem enhancing drug that surges through the brain telling you how great your ideas are. This leaves the powerful vulnerable to making overconfident decisions that lead them to dead-end alleys.”

Still curious? Read the study.