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Knowing how competent and skilled we are against other people helps us figure out when we can go ahead with our decisions or when we instead need to look for advice.
But psychological research suggests that we frequently overestimate our own abilities. This is known as the Dunning-Kruger effect. It explains why over 100 studies reveal that people show illusory superiority.
People lacking knowledge and skill in certain areas suffer a double curse.
In other words, poor performers won't notice how bad they are doing. For example, a study showed that 25% of teams in a college debate tournament lost nearly four out of every five matches, but thought they were winning almost 60%.
The Dunning-Kruger effect isn't about an ego blinding us to our weaknesses. Once people can spot their deficits, they usually will admit to them. That is why people with moderate experience often have less confidence in their abilities. They know there's a lot they don't know.
Experts tend to make a different mistake. They tend to be aware of their knowledge and assume everyone else is knowledgeable too. As a result, they don't see how unusual their abilities are.
On average, people tend to rate themselves better than most in disciplines ranging from health, leadership skills, ethics and more.
Those with the least ability often overrate their skills to the greatest extent. People who are measurably poor at logical reasoning, grammar, financial knowledge, math and emotional intelligence tend to rate their expertise almost as favourably as actual experts do.
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