Dunning-Kruger Effect 

(Unskilled individuals overestimating their
 abilities and experts underestimating theirs) 

In the field of Cognitive Psychology, the Dunning–Kruger effect is a Cognitive Bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of Meta-cognition, people cannot objectively evaluate their competence or incompetence. As described by social psychologists David Dunning and Justin Kruger, the bias results from an internal illusion in people of low ability and from an external misperception in people of high ability; that is, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others  (Kruger, Justin; Dunning, David (1999). 

The psychological phenomenon of illusory superiority was identified as a form of cognitive bias in Kruger and Dunning's 1999 study, "Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments". The identification derived from the cognitive bias evident in the criminal case of McArthur Wheeler, who, on April 19, 1995, robbed two banks while his face was covered with lemon juice, which he believed would make it invisible to the surveillance cameras. This belief was based on his misunderstanding of the chemical properties of lemon juice as an invisible ink.(Why losers have delusions of grandeur". New York Post. 23 May 2010. Retrieved 19 March 2014.) 

Other investigations of the phenomenon, such as "Why People Fail to Recognize Their Own Incompetence" (2003), indicate that much incorrect self-assessment of competence derives from the person's ignorance of a given activity's standards of performance. Dunning and Kruger's research also indicates that training in a task, such as solving a logic puzzle, increases people's ability to accurately evaluate how good they are at it.  (Dunning, David; Johnson, Kerri; Ehrlinger, Joyce; Kruger, Justin (1 June 2003).

“The fool doth think he is wise, but the wise man knows himself to be a fool.”   

*William Shakespeare Touchstone, in As You Like It .

“A little knowledge is a dangerous thing” 

 Alexander Pope in An Essay on Criticism, 1709. 

“Ignorance more frequently begets confidence than does knowledge”

Charles Darwin in The Descent of Man in 1871.

In short,  individuals who are the least competent at a task often incorrectly rate themselves as high-performing even when they lack particular knowledge or expertise. 

Implications:The Dunning-Kruger effect:

 

According to David Dunning, If you’re incompetent, you can’t know you’re incompetent, and that has two major implications:

1. It leads to mistakes and poor decisions.
2. It prevents you from catching your errors.

In other words, not only does the Dunning-Kruger effect make you perform poorly, but it also makes it hard to recognize how badly you are in fact doing.

Two Key Reasons Why this Bias Exists  

1. Ego: We tend to overestimate our abilities and knowledge on various topics as a way to increase our confidence. We do not want to plead ignorance to others or ourselves. In turn, our minds create a natural defense to respond to these situations (Ehrlinger et al., 2008).   

2. Knowledge Gaps: Our below-average abilities in an area inherently makes us a bad judge of how good we are in that skill. Therefore, having knowledge gaps makes it difficult for us to detect our own errors. Imagine trying to identify a well-written piece if you yourself do not possess solid grammar skills. (Dunning & Kruger, 1999).