Sarah is an amateur singer. She sings in house parties, and friendly gatherings. She sings pretty well, and actually enjoys it too. She plans to make a career out of it.
She participated in a local signing competition recently, but wasn’t able win. Her friends suggested to go to a singing class and take proper voice training which she has been resisting. She thinks she sings pretty well already, and the judges in that competition weren’t fair with her. Maybe YouTube is a good place to start and get some recognition. After putting up a couple of videos and not getting many views, she is trying Instagram — shorter videos would be better. People these days don’t have the attention span.
Another amateur singer saw her sing on Instagram and gave some suggestions in the comments —she should focus on her pronunciation and breathing — which Sarah ignored. She wants to become a star and has no regards for such amateur talents. She knows what she is doing. One day she’ll become famous. She already has the talent. It’s just a matter of time.
Manisha is the new marketing manager in a startup. She has recently launched a new campaign which has been bringing about 2500 new users on a daily basis into the platform.
She is really proud of what she has bee able to achieve, and has been telling about it to all her colleagues, friends, and relatives. She is secretly hoping for the CEO to congratulate her for this achievement right after he gets back from his business trip.
She is called after a week, not by the CEO, but by her boss. She’s told that her campaign isn’t a success, and they are planning to take it down. Turns out the previous daily signups had in fact been higher — around 2700. Manisha’s new campaign is hurting the business.
This has been the most successful campaign in Manish’a whole career and she isn’t ready to accept the fact that this has not been successful. Maybe the numbers aren’t correct, or the attribution is wrong, or maybe they have mixed up the numbers with some other campaign. Clearly, there has been some kind of mistake, she’s convinced.
Satya has been playing the stock market for years. He mainly uses popular finance websites to do his research, and depends on blogs and finance YouTube channels to get hot tips from ‘stock experts’. He is also part of a private Telegram channel where they share daily stock suggestions.
He has built a good reputation among his friends and is commonly known to give out financial advices to people. He thinks he is pretty good at it and will eventually become successful — maybe he’ll do it full time someday. Dalal Street may not be that far away after all.
It might be important to note, however, that not all those who take his advice have seen financial gains. Despite his history of losses, Satya tends to focus on the small amount of appreciating stocks in his portfolio.
If you ask him, he would say that it’s natural to have a few hiccups, or the 80/20 rule is at play, or ya he took some risks that didn’t pay off, but he’ll recover them by investing in other successful companies.
The truth of the matter is his returns are far below the market average. If he had just bought an index fund, he would have done remarkably better. Don’t tell Satya that though because he is the stock guy.
Have you ever noticed that most startups gurus or financial analysts are people without any substantial track record in business or finance?
Truth is, the less you know about a subject, the more you believe yourself to be an expert. Only once you have some experience do you start to recognise the breadth and depth you have yet to learn. I’ve seen this a lot in the field of finance, productivity, design, and startups. Stupid amateurs think they know it all.
Unless you really have faith in their credentials, chances are that all these “experts” are suffering from The Dunning-Kruger Bias.
The Dunning Kruger bias occurs when unskilled people believe they are skilled, knowledgeable or exceptionally experienced in something when they’re not.
In other words, most people think they are good at something but actually they’re just confident fools. These people use that same confidence to mask their ignorance and incompetence.
I’m sure you can think of someone like this. Your boss perhaps — one who is running a bad business but isn’t ready to accept his incompetence or take any feedback. Or maybe a colleague who is all show and no tell. You might think that they are delusional, and you won’t be wrong.
“True wisdom is knowing what you don’t know”
― Confucius, Sayings of Confucius
On the other hand, people who are talented or extremely knowledgeable are so humble that they believe their superior ability to be average. These people underestimate their relative ability and think that tasks which are easy for them are just as easy for others.
“A fool doth think he is wise, but the wise man knows himself to be a fool.”
— Shakespeare, As You Like It
In 1995, a man named McArthur Wheeler was caught while robbing a bank in broad daylight. Surprisingly he didn’t cover his face with anything while robbing.
At first he denied all the charges. But the CCTV camera records clearly showed that he was robbing banks. Wheeler was surprised at why his plan didn’t work. Wheeler’s master plan was to cover his face with lemon juice while robbing the bank. He told the cops that lemon juice should have made his face invisible on security cameras.
His logic — as lemon juice can be used to write invisible letters that become visible only when the letter is held close to a heat source, he thought, the same thing would work on his face too.
By smearing lemon juice all over his face, he thought that his face would become invisible to the security cameras at the bank. He did not just think that, he was pretty confident about this. He even checked this “trick” by taking a selfie with a polaroid camera. “I’m not sure if the film was defective, or the camera wasn’t operated properly, but the camera did give me a blank image.” The blank image made him absolutely sure (confirmation bias) that this trick would work.
The story of Wheeler caught the attention of Cornell University psychologists David Dunning and Justin Kruger. The psychologists were interested to study about the utter confidence of Mr. Wheeler. They published their findings from a series of experiments and coined the term Dunning-Kruger Bias.
Regardless of age or education level, the Dunning-Kruger bias can be found whenever self-assessment takes place. From reading comprehension, driving skills, or sports ability, you generally rate yourself higher than others.
When people are asked to self-assess their reasoning skills, humour or grammatical skills, there’s a good chance you’ll see overconfidence. In one study, students were shown test scores then asked to estimate their own rank. Skilled students estimated their rank accurately whereas unskilled students overestimated theirs.
This bias also extends itself into professional work where it may be downright dangerous or damaging. Examples of this bias can be seen in the medical and financial community. In 2012, the National Financial Capability Study asked 25,000 financial respondents to rate their own financial knowledge. The self-assessments were then rated for accuracy.
Roughly eight hundred participants who had filed for bankruptcy in the last two years scored abysmally low. Despite their total lack of financial knowledge, the participants with the lowest scores actually reported their level of knowledge as higher than the other participants.
However, all isn’t that bad. More recent studies have attempted to refute the absolute black-and-white predictions of Dunning-Kruger bias —that the unskilled performers are the least aware of it.
A study by Burson, Larrick, and Klayman in 2006 suggested, “on moderately difficult tasks, best and worst performers differ very little in accuracy, and on more difficult tasks, best performers are less accurate than worst performers in their judgments. This pattern suggests that judges at all skill levels are subject to similar degrees of error.”
In other words, on easy tasks, where there is a positive bias, the best performers are also the most accurate in estimating their standing, but on difficult tasks, where there is a negative bias, the worst performers are the most accurate.
So the Dunning-Kruger effect isn’t always influencing you to think that you are smart and intelligent when you are actually mediocre. It can be broken down like this: The more skilled you are, the more practice you’ve put in, and the more experience you have, the better you can compare yourself to others.
As you strive to improve, you begin to better understand where you need work. You start to see the complexity and nuance; you discover masters of your craft and compare yourself to them and see where you are lacking.
“Ignorance more frequently begets confidence than does knowledge.”
— Charles Darwin
Whether it’s playing guitar, or writing articles, or telling jokes, or taking photos, or running businesses, or picking stocks — amateurs are far more likely to think they are experts than actual experts are.
Education is as much about learning what you don’t know as it is about adding to what you do.