The name of this part is Overconfidence. Needless to say, its a must read.
"Once you adopt a new world, you immediately lose much of your ability to recall what you used to believe before your mind changed."
"We all have a need for the reassuring message that actions have appropriate consequences, and that success will reward wisdom and courage. Many business books are tailor-made to satisfy this need."
"In a memorable example, Dawes showed that martial stability is well predicted by a formula:
frequency of lovemaking minus frequency of quarrels
You don't want your result to be a negative number."
"When action is needed, optimism, even of the mildly delusional variety, may be a good thing."
"They felt no need to explain why they expected to succeed where six or seven others had failed. A common thread of boldness and optimism links businesspeople, from motel owners to superstar CEOs"
"President Truman famously asked for a "one-armed economist" who would take a clear stand; he was sick and tired of economists who kept saying, "On the other hand..."
"An unbiased appreciation of uncertainty is a cornerstone of rationality - but it is not what people and organizations want."