AP PSYCHOLOGY

Detailed explanation-1: -The Dunning-Kruger effect effect occurs when a person’s lack of knowledge and skills in a certain area cause them to overestimate their own competence. By contrast, this effect also causes those who excel in a given area to think the task is simple for everyone, and underestimate their relative abilities as well.

Detailed explanation-2: -Named after psychologists David Dunning and Justin Kruger, the Dunning-Kruger effect is a type of cognitive bias that causes people to overestimate their knowledge or ability, particularly in areas with which they have little to no experience.

Detailed explanation-3: -Dunning-Kruger effect, in psychology, a cognitive bias whereby people with limited knowledge or competence in a given intellectual or social domain greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general.

Detailed explanation-4: -Overconfidence bias is a tendency to hold a false and misleading assessment of our skills, intellect, or talent. In short, it’s an egotistical belief that we’re better than we actually are. It can be a dangerous bias and is very prolific in behavioral finance and capital markets.