Overconfidence and Complexity

"I don't mean to suggest that you're indecisive, Mr Hunter. Not at all. Just...complicated. Of course, that's the way the Navy wants you. Me, they wanted simple."
--Captain Frank Ramsey (Crimson Tide)

Interesting proposition by Peter Atwater: the higher the confidence, the greater the creation of complex systems. Highly confident people and organization embrace innovation and new technology under the belief that there is unlimited opportunity ahead. Things become more interlinked.

Atwater suggests extreme complexity as an indicator of peaks in confidence. Mortgage and derivative markets, healthcare, global sourcing, and even higher ed have been exhibiting this characteristic, he says.

I would add current financial market supply chains that count 'dark pools,' complex market making arrangements, and high frequency trading among their complex features.

Pushing his logic to the extreme in the opposite direction seems to add validity: the lower the confidence, the greater the creation of simple systems.

When confidence is lacking, people like to keep things simple.