Passage 2Without some confidence, we could not make decisions or tackle any kind of risky endeavor; we would be constantly second-guessing ourselves. That said, too much confidence can be a problem, and nothing inflates confidence like success. Take Alan Greenspan, who until the near meltdown of the financial system in 2008 was considered one of the best Federal Reserve chairmen in U.S. history. Afterwards, it became apparent that Fed policy makers, led by Greenspan, had placed too much faith in their financial models. In testimony to Congress in October 2008, Greenspan acknowledged his own shock that the models had failed. And, of course, he was not the only one who succumbed to excessive confidence. During the housing boom, many leaders of large and small banks and mangers of mortgage lending, investing, and trading operations stopped examining the key assumptions that underpinned the models they were using.Success can make us believe that we are better decision makers than we actually are. In a simple recent study of managers in various industries, we asked members of one group to recall a time when they experienced a success in their professional lives and members of a second group to recall a time when they experienced a failure. We then asked people in both groups to engage in a series of decision-making tasks and embedded measures in the exercise that allowed us to assess their confidence, optimism, and risk-seeking behavior. Compared with the executives who’d recalled a failure, those who’d recalled a success were much more confident in their abilities, made more-optimistic forecasts of their future success, and were more likely to take bigger bets. These finding are consistent with research examining how success breeds overconfidence in other contexts.Overconfidence inspired by past successes can infect whole organizations, causing them to dismiss new innovations, dips in customer satisfaction, and increases in quality problems, and to make overly risky moves. Consider all the companies that grew rapidly through acquisitions only to stumble badly after biting off one too many; the countless banks that made ever-riskier loans in the past decade, sure of their ability to sort good borrowers from bad; and all the darlings of the business media that had winning formulas but did not try to update or alter their strategies until it was way too late.6. The example of Alan Greenspan suggests that _________.

A. without some confidence we could not make decisions
B. without confidence we would always second-guess ourselves
C. even the best Federal Reserve chairman could make mistakes
D. too often, too much confidence can be a problem