Pascal Mamassian, a researcher at Centre National de la Recherche Scientifique and Universite Paris Descartes said that overestimating one's abilities can have hazardous consequences such as an overconfident investment banker losing millions on a "can't-miss" start up.

Mamassian had study participants sit at a computer and told them to press a key in synchrony with a visual "blob" that would appear on the screen. Participants would be awarded points if they succeeded and docked points if they pressed the key prematurely or too late.

Mamassian used a mathematical model to examine how participants would need to adjust their key tapping strategy in order to maximize their gain and minimize their loss.

The study, published in Psychological Science, found that participants routinely failed to aim toward the optimal time but instead displayed overconfidence in their actions.

"They underestimated the magnitude of their uncertainty and the cost of their error," Mamassian said in a statement. "Overconfidence is not limited to the realm of subjective beliefs and cognitive judgments but appears instead to reflect a general characteristic of human decision making."