Dunning-Kruger Effect
People with low ability overestimate their competence, while experts underestimate theirs.
What It Is
The Dunning-Kruger effect is a cognitive bias where people with limited knowledge or competence in a domain greatly overestimate their own ability. Conversely, experts tend to underestimate their relative competence, assuming tasks that are easy for them are easy for everyone. The less you know, the more confident you tend to be.
Why It Matters
This effect explains why beginners are often overconfident while experts are more cautious. It's crucial for self-assessment, hiring, and learning. Recognizing this bias helps you stay humble when learning something new, seek feedback more actively, and be skeptical of overconfident claims from people with limited expertise.
How to Apply It
- 1
When learning something new, assume you know less than you think
- 2
Actively seek feedback from experts to calibrate your understanding
- 3
Be wary of strong opinions from people with limited experience
- 4
As you gain expertise, remember that things obvious to you aren't obvious to others
- 5
Use objective tests and metrics rather than self-assessment
Example
After watching a few YouTube videos on investing, someone might feel confident enough to day-trade with their life savings, not realizing how much they don't know. Meanwhile, a professional investor with decades of experience might be much more cautious, aware of all the ways things can go wrong.