The Dunning-Kruger effect: How do incompetent people assess their level of competence?
It Dunning-Kruger effect is a cognitive bias where people with a low level of competence overestimate their own abilities. This is because they do not have sufficient knowledge to recognize their own shortcomings. On the other hand, experts often underestimate their abilities because they are aware of how complex a topic really is.
Here are five recognisable examples:
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The novice do-it-yourselfer
Someone who is just starting to do jobs thinks it is very easy to brick a wall or tile a bathroom. Without experience or insight into techniques and pitfalls, he starts enthusiastically, but ends with crooked tiles and leaks. -
The amateur stock market investor
Someone who watches a few YouTube videos about stock trading thinks they can beat the market. He impulsively invests in stocks without doing any real research and quickly loses a lot of money, even though he previously thought he was a “genius investor”.
