Overconfidence effect

We talk about overconfidence effect when, in making a purchase selection where the benefits derived will be dependent upon a change in future behavior, customers are often overconfident with respect to their ability to change behavior and derive value from the future use of the offering, and overconfident with respect to their ability to change their purchase selection in the future to a more economically-valued position.

Overconfidence effect also refers to the inability of customers’ expressed behavior to match expected behavior with respect to their future self-control and future economic efficiency.