What is modesty in economics?

In economics, modesty refers to the principle that individuals and firms should not overestimate their knowledge or abilities when making decisions. It emphasizes the importance of humility in assessing one's own information and the potential uncertainties in the market. Modesty can lead to more cautious and prudent behavior, helping to avoid overconfidence that can result in poor choices or financial miscalculations. This concept encourages a balanced view, acknowledging limitations and the complexity of economic systems.