People, no offense to those who might be reading, are conceited nitwits who think they're far better at things than they actually are. But it also turns out there are certain situations in which they are convinced they're way worse than they actually are. Here's how low self-esteem strikes a blow against accuracy.
In general, we think we're pretty great at everything. Ninety-three percent of drivers consider themselves above average, most employees think they are above the average level of their division, and about a third of workers think they're in the top 5% of their group. There's just something in us that makes us feel like we're doing pretty good compared to nearly everyone else. It's gained the nickname "The Lake Wobegon effect" because of the novel Lake Wobegon Days, by Garrison Keillor, about the little town of Lake Wobegon, Minnesota, where "all the children are above average." Knowing little-to-nothing about the subject doesn't ameliorate the effect. The now-infamous Dunning-Kruger effect shows that people who lack basic knowledge about a subject lack the experience to understand how little they know, and vastly overestimate their comprehension of the subject.
There's also a converse reaction — given the right circumstances, people under-estimate their skills at certain tasks. It might look like this is achieves a nice balance between conceitedness and modesty, but unfortunately there's no experimental evidence to support that. People tended to believe they were very poor at things like juggling or riding a unicycle. To be fair, the experimenters had to pick skills that could be easily tested and were fairly obscure. It's tough to apply the below-average effect, as it's called, to regular life because very few people regularly engage in activities they suck at. It's the quirky and strange (and largely unimportant) activities that cause us to underestimate ourselves.
People also underestimate their likelihood of experiencing unlikely events. For example, if they were to get a lottery ticket with a 1-1000 chance of winning, they'd put their odds at 1-10,000. When their absolute likelihood of success is low, people will underestimate it. When their absolute skills are poor, they will underestimate themselves. It looks like we'll give ourselves anything but a realistic estimation of our abilities.
[Via Lake Wobegon Be Gone]