The illusion of control is a mental bias leading people to overestimate the control they have over the outcome of events. Even when the outcome of situations is demonstrably a matter of chance and not of skill or effort, researchers find that people may feel like they can influence the outcome. Like the optimism bias, it is a so-called positive illusion and is generally associated with good mental health.
What Causes the Illusion of Control
Several factors have been identified as contributing to the illusion of control. It is thought to be adaptive; after all, a sense of control confers many benefits.
In reality, people differ in their need for feeling in control; they may engage in actions that allow a sense of control whether or not it is a wise decision. Especially for those involved in financial markets, there is concern that the illusion of control may stem from a lack of information, which can cause people to overtrade or make risky bets. Yet another contributor is overconfidence, which can lead people to overestimate the actual control they have over events.
The illusion of control was first described by psychologist Ellen Langer in 1975. Originally, it was thought that the illusion of control is a mechanism for preserving or enhancing self-esteem , allowing people to take credit for successful actions and to deny responsibility for failures, and it is strongest in people most personally involved in the action. Recent studies suggest it is not necessarily a motivated behavior but, rather, results from mistaken judgments of contingency. In this view it is an illusion of causality—people’s sense of control is misled by their likelihood of taking action.
Effects of the Illusion of Control
A sense of control is considered a highly adaptive trait. In one well-controlled study that measured 35 indicators of health, those with the highest sense of control had reduced risk of mortality and lower risk of stroke, lung disease, physical limitations, cognitive impairment, chronic pain , and higher self-rated health.
A sense of control encourages such health-promoting behaviors as physical activity and sleep hygiene and is related to positive affect, life satisfaction, optimism , a sense of purpose, and mastery in areas of personal, health, and financial matters. Numerous studies show that feelings of lack of control can lead to anxiety , helplessness, pessimism , failure to act when it is possible to influence events, and even depression .
The illusion of control can give people a sense of agency. It motivates people to strive toward challenging goals . It can bolster self-esteem.
But it is not a uniformly beneficial attribute. Studies show that it can encourage magical thinking and superstition (your lucky numbers led to your lottery win, right?). It also leads to bad decision-making . It can prevent people from taking proper steps to fully analyze a situation. It is also believed to be a driving force of gambling.
The Role of Power in the Illusion of Control
Sometimes it is situations that cause people to overestimate the control they have. The most notable, and likely the best-studied, situation is the possession of power. From managers to CEOs, commanders and generals, the wealthy and socioeconomically advantaged, those who experience power of any kind (or degree) are poised to inflate their sense of control over events, even events having nothing at all to do with their domain of power or expertise.
Their position can lead them to develop hubristic overconfidence and make decisions that lead to their downfall. To this day, financial experts contend that the collapse of the longstanding (founded in 1850) investment bank Lehman Brothers, an event that ushered in the Great Recession of 2008, was caused by such behavior.
The illusion of control can make people overconfident in the face of decisions that require serious deliberation and carry big risks. The financial community recognizes how the illusion of control can lead investors astray, for example, in picking stocks. The time a person spends researching stocks and analyzing financial statements and performance charts may lead them to believe they have some control over the outcome of their investments or know the best time to buy or sell, when in fact no one fully understands or is in control of market forces.
Although illusory control can bring the confidence that encourages power holders to persist in achieving difficult goals, it also can cause overconfidence that leads them to lose touch with reality. In a now-classic study, a team of international researchers found that simply gaining power—just being randomly assigned to the role of manager rather than subordinate—leads to the illusion of personal control over “outcomes that were beyond the reach of the individual.” They reported that “an illusory sense of control is a basic response to the psychological experience of power.” Experiencing power leads people to “grossly overestimate” their abilities. It also inflates their self-esteem and optimism and beefs up their action orientation.
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