The Dunning-Kruger effect is when people just don’t realise how incompetent they are once they have a tiny bit of knowledge about a subject. It’s named after researchers David Dunning and Justin Kruger, who carried out a series of experiments at Cornell University.
They tested people’s abilities in the areas of humour, grammar, and logic, comparing their actual scores to those people’s own estimation of their performance.
What you don’t know
In each test, those who were in the bottom quartile – the less competent participants – massively overestimated their abilities, putting themselves in the 62nd percentile on average when their actual test scores put them in the 12th.
The other, more competent, people in the study did not overestimate their ability to the same degree, and in fact, those in the top quartile actually underestimated themselves – a finding echoed in other studies when women who are highly skilled in maths are asked to estimate their own ability.
Dunning and Kruger explain that “most people have no trouble identifying their inability to translate Slovenian proverbs, reconstruct an eight-cylinder engine, or diagnose disseminated encephalomyelitis” – in other words, things they know absolutely nothing about. But if a person has just a little knowledge, theory, or experience that suggests they might know the answers, they tend to overestimate themselves.
They say it happens because the skills that make somebody good at something are often the same skills needed to rate their level of competence.
Perceptions versus reality
They liken it to a brain disorder called anosognosia where damage to the right side of the brain leaves people paralysed on the left side of the body. When doctors place an object in front of a person with anosognosia and ask them to pick it up with their left hand, patients not only fail to comply but don’t understand why.
When the person is asked, they might say they are tired, or they didn’t hear the doctor’s instructions – but never that they are suffering from paralysis; anosognosia both causes paralysis and means the person is unaware they simply cannot move their left hand.
Incompetence, like anosognosia, means people fail to see the flaws in their thinking or the answers they lack. And the effect is often seen when people are tested on their financial knowledge.
In 2012, the US National Financial Capability study asked around 25,000 people to rate their own financial knowledge, of whom 800 had filed for bankruptcy, and then went on to measure their actual financial literacy.
Writing for Pacific Standard, Dunning explains that the bankrupt respondents performed poorly on the test – in the 37th percentile, on average. But they rated their financial knowledge as better than the other respondents did: 23% of the bankrupts gave themselves the highest possible self-rating, while only 13% of the rest did.
“An ignorant mind is precisely not a spotless, empty vessel,” said Dunning, “but one that’s filled with the clutter of irrelevant or misleading life experiences, theories, facts, intuitions, strategies, algorithms, heuristics, metaphors, and hunches that regrettably have the look and feel of useful and accurate knowledge.”
Similarly, in 2015's National Financial Capability study, when asked how good they were at day-to-day financial matters, 42% gave themselves a perfect score – yet 29% of these respondents engaged in costly credit card behaviours, such as paying late fees, and 12% had overdrawn their current account.
Fake it until you make it?
In another study, Dunning and colleagues found that those who believed they understood money matters also claimed to be aware of financial terms that were completely made up. They provided participants with 15 concepts, of which three were fake: pre-rated stocks, fixed-rate deduction and annualised credit.
Some 93% of participants claimed they knew at least one of these made-up concepts, a phenomenon known as overclaiming. But overclaiming does not necessarily make somebody a liar, said Dunning. “Warning people that some concepts are fake does not eliminate their overclaiming, which suggests that mistaken claims are honest,” he said.
Of course, experts might well be confident in their ability too, for good reason. But what the Dunning Kruger effect shows us is that confidence alone isn’t necessarily a good indication of how much someone actually knows. Just having a little knowledge really can be a dangerous thing.