The Dunning-Kruger Effect: How to Avoid Stupid Overconfidence

In 2005, I tried online poker for the first time. I learned the rules, deposited $30, and quickly doubled my money. There was no question in my mind—I was a natural at the game. So, I played again the next day… and quickly lost it all.

It wasn’t until I started studying poker theory and strategy that I began to grasp the complexity of the game. I learned about pot odds, expected value, hand ranges, and many other concepts that I previously had been oblivious to.

The more I learned, the more I realized that I didn’t understand. But my game kept improving. Eventually, I reached the point where I could play poker full time. And during those years, I noticed something interesting.

Competence ≠ Confidence

Beginners usually make every play with certainty, while experienced players question every decision. Bad players are confident, and good players doubtful. And that tendency doesn’t just show up in poker but in any area of expertise.

In fact, it’s so common that Bertrand Russell once stated, “The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”

And he’s not alone; Socrates, William Shakespeare, Charles Darwin, and Friedrich Nietzsche have all commented on our propensity to be more confident the less we know.

But it wasn’t until the late 1990s that this tendency was given a name. That’s when social psychologists David Dunning and Justin Kruger did an experiment where they tested people’s abilities in logical thinking, grammar, and sense of humor.

It turned out that those who performed the worst dramatically overestimated their ability. And conversely, those who performed the best believed that they had in fact done poorly.

The Dunning-Kruger Effect

Dunning and Kruger reported their findings in an article called ‘‘Unskilled and unaware of it: how difficulties in recognizing one’s own incompetence lead to inflated self-assessments,”1 and the tendency came to be called the Dunning-Kruger effect.

According to David Dunning, “If you’re incompetent, you can’t know you’re incompetent,”2 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.

So, whenever you feel confident in a certain area of expertise, keep this tendency in mind. Remember that confidence might very well be a sign of invisible holes in your competence.

Be skeptical of your abilities, especially when you’re a beginner. You’ll make fewer mistakes, reach better decisions, and learn more from feedback.

Footnotes

  1. Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments
  2. The Anosognosic’s Dilemma: Something’s Wrong but You’ll Never Know What It Is (Part 1)

This article is an excerpt from my book The Decision-Making Blueprint.