If you think you can score a point off Serena Williams, you're not purely rational

In the first week of my ECONS102 class, we discuss behavioural economics. In particular, we discuss a range of behavioural biases and heuristics that create deviations from 'purely rational' decision-making, and lead to what 2017 Nobel Prize winner Richard Thaler has termed 'quasi-rational' decision-making. One of those biases is positivity bias, or the Dunning-Kruger effect (both related to what some psychologists call self-enhancement), where people overestimate their ability.

There are lots of real-world examples of positivity bias. If you've ever watched professional darts or poker and thought, 'that doesn't look too hard; I could totally do that', then you've been subject to it. And there was an excellent example reported in Newsweek last week:

A recent YouGov poll suggests 12 percent of men, or about one in eight, think they could score a point off Serena Williams.

The poll, conducted of 1,732 adults in the UK on Friday, revealed that only 3 percent of women thought they could get one past the 23-time Grand Slam champion.

Maybe women are more realistic about their chances, but I don't think even 3 percent of anyone is going to score a point in a game against Serena Williams. According to this article, her average first serve speed at the 2014 US Open was 108 mph (174 km/h) - that's the average serve speed. And her return game is pretty good too. Unless you're a top professional tennis player, you're not scoring a point. Although, maybe if you played the game on a dark night, with no lights, and matt black tennis balls...

Positivity bias makes us more likely to believe that we can achieve things, whether or not those things are realistically achievable. You might think that would be pretty benign in its effect. So what - we have good feelings about ourselves? However, this bias can lead us to invest in activities that are underproductive (because we aren't as talented, or productive, as we think we are), wasting resources in the process. In other words, it may cause us to underestimate the opportunity costs of some activities, making us potentially worse off than if we had never attempted them. Like these for example:

Purely rational decision-makers have realistic understandings of their strengths and weaknesses, and can accurately judge their ability to successfully undertake activities. Unfortunately, we're not purely rational decision-makers, but that doesn't mean that Serena Williams will be any easier to take a point off.