Avoiding the Dunning-Kruger Effect

Written by Barry Investment Advisors | Dec 19, 2022 6:38:28 PM

“I don’t need to call someone, I can fix this myself.” For many people, this statement is often followed by hours of difficult and frustrating work—and it usually ends with a phone call to the same expert they should have hired in the first place. This is known as the Dunning-Kruger Effect: a type of cognitive bias that fools us into thinking we have the abilities or skills to do something, even if we don’t. This chart outlines how the Dunning-Kruger Effect works—and why we shouldn’t always let self belief guide our decision-making.