Self-confidence is very important. If you don’t think you can win, you will take cowardly decisions in the crucial moments, out of sheer respect for your opponent. You see the opportunity but also greater limitations than you should. I have always believed in what I do on the chessboard, even when I had no objective reason to. It is better to overestimate your prospects than underestimate them.
World chess No. 1 Magnus Carlsen interviewed in the FT, December 8th, 2012.
Enticing formula, neatly described.
Beyond the confines of a chessboard, however, there are times when the cowardly decision makes sense. It may be that you sufficiently understand your opponent — say a berserker with a samurai sword rampaging through Tesco — and see the limitations exactly as you ought to.
Overestimating your prospects can pay dividends, but not without costs. Think: Napoleon, Mourinho.