The Dunning Kruger Effect & Social Norms | David Dunning on Masters In Business with Barry Ritholtz

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Key Takeaways

  • “As you gain experience, you unfortunately start with a burst of overconfidence…And then experience basically is correcting your flattering impression of your skill as time goes on.” – David Dunning
  • When it comes to moral and ethical situations, people often overestimate how much better they are than the average person in a given situation (e.g. They would donate more food to charity than the average person)
    • “People are surprisingly accurate about the general rate, about human nature in general…they just think they…are exempt from those forces” – David Dunning
  • When people think about the future, they are often overly optimistic
    • “People really underestimate how long it would take to complete projects, they underestimate how long it is going to take for their business to be profitable” – David Dunning
  • Following social norms is ingrained in us: “There is a biology to it, it’s that we are primed to have anxiety mechanisms that are really ready to go when we are in a situation of norm violations” David Dunning
    • People often get anxiety when they watch a TV show where a character is breaking social norms

Intro

Books Mentioned

The Dunning-Kruger Effect

  • The Dunning-Kruger Effect is named after David Dunning and Justin Kruger
    • The effect is a cognitive bias in which people assess their cognitive ability as greater than it is
  • David and Justin didn’t come up with the Dunning-Kruger effect chart, but David says it’s an accurate representation
    • “As you gain experience, you unfortunately start with a burst of overconfidence…And then experience basically is correcting your flattering impression of your skill as time goes on.” – David Dunning
      • This can be seen in airplane pilots: “It’s not beginning pilots who are the most dangerous, it’s pilots with let’s say 600 or 800 flight hours, they have enough experience to think that they’ve got this and they enter into what is referred to as the killing zone where accidents are most likely to happen.”

Other Common Cognitive Biases

  • If you look at one person at a time, they’re unique, but if you look at a lot of people together, they act mostly the same
    • When it comes to moral and ethical situations, people often overestimate how much better they are than the average person in a given situation (e.g. They would donate more food to charity than the average person)
      • “People are surprisingly accurate about the general rate, about human nature in general…they just think they…are exempt from those forces” – David Dunning
  • When people think about the future, they are often overly optimistic
    • “People really underestimate how long it would take to complete projects, they underestimate how long it is going to take for their business to be profitable” – David Dunning
      • People tend to base their planning and their ideas on the most optimistic scenario rather than the most pessimistic scenario or maybe even the most realistic scenario
  • People don’t know what they don’t know or the unknown unknowns
    • “There is a lot of work showing that people just don’t pay attention to what they don’t know when they are making predictions or when they are planning things out” – David Dunning
      • If you want to do something you don’t know how to do, reach out to people who’ve already accomplished that task and ask them for advice
  • For the most part, trust is the default setting: people will trust a stranger until evidence proves otherwise
    • When reading the news, people should act as journalists and look at multiple sources before accepting the information as factual
      • “We trust other people because we have to respect them and to distrust them is to disrespect them” – David Dunning

The Importance of Social Norms

  • When making a decision, people often defer to authority and also to each other
  • When it comes to social norms, there are a lot of rules in our behavior that we follow automatically: “[There are] a lot of rules in our etiquette that we are following but we are so skilled at them we don’t know that we are following them”David Dunning
    • Every now and then a wrong-side surgery happens because the surgeon didn’t want to break social norms and double-check with the patient which side the surgery was taking place
      • “We are trained in cooperating…we are not really well trained in the psychology of dissent or the psychology of objection”
  • Following social norms is ingrained in us: “There is a biology to it, it’s that we are primed to have anxiety mechanisms that are really ready to go when we are in a situation of norm violations” David Dunning
    • People often get anxiety when they watch a TV show where a character is breaking social norms

Additional Notes

  • A good litmus test if you’ve grown in life is to ask yourself: Are you vaguely embarrassed by who you were 5 years ago? 
    • If the answer is yes, that’s good news because it means you’ve learned a lot since then
  • People are experts at rationalizing their actions
    • “We can come up with rationales for why we do what we do quite easily. Our brain is an incredible storyteller. But, you know, incredible storytellers sometimes tell fiction, and our brain is quite good at coming up with fiction at times.”David Dunning
  • David’s advice for college graduates looking to get into the psychology field: Get a mentor, even better, get two or three
    • Start a blog, share your ideas, and network with people ahead of you
Masters in Business : ,
Notes By Alex Wiec

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