Need to comment/evaluate/discuss this mini-essay down below. Essentially it takes to act as an examiner and comment should be e thorough, justified, and elaborate to the extent possible. Casual answers such as "Very nice, I agree..." are not academic, justified, formal, and elaborate are not acceptable.

The overconfidence effect is observed when people's subjective confidence in their own ability is greater than their objective (actual) performance. One example of overconfidence is the illusion of control. The illusion of control occurs when people believe they have control over a situation when in reality, they do not. For instance, investors will decide to buy large amounts of stock in the company they work for because they think they have more control over how the company operates than they actually do. In addition, investors may trade too often as they think that trading will give them more control over the outcome of their investments. However, it is important to keep in mind that investing is a matter of probabilities and that a company's returns usually depend on a number of factors. In some cases, those factors may be beyond the company's control. Therefore, believing that we have more control than we really do, can be dangerous in business and investing as it does not help us estimate how risky a situation is.