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A statistical explanation of the Dunning-Kruger effect

Author

Listed:
  • Jan R. Magnus

    (Vrije Universiteit Amsterdam and Tinbergen Institute)

  • Anatoly A. Peresetsky

    (New Economic School)

Abstract

An explanation of the Dunning–Kruger effect is provided which does not require any psychological explanation, because it is derived as a statistical artefact. This is achieved by specifying a simple statistical model which explicitly takes the (random) boundary constraints into account. This model fits the data perfectly.

Suggested Citation

  • Jan R. Magnus & Anatoly A. Peresetsky, 2021. "A statistical explanation of the Dunning-Kruger effect," Working Papers w0286, New Economic School (NES).
    • Handle: RePEc:abo:neswpt:w0286
    as

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    File URL: https://www.nes.ru/files/Preprints-resh/WP286.pdf
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    References listed on IDEAS

    as
    1. Jan R. Magnus & Anatoly A. Peresetsky, 2017. "Grade Expectations: Rationality and Overconfidence," Tinbergen Institute Discussion Papers 17-054/III, Tinbergen Institute.
    2. Rachel A. Jansen & Anna N. Rafferty & Thomas L. Griffiths, 2021. "A rational model of the Dunning–Kruger effect supports insensitivity to evidence in low performers," Nature Human Behaviour, Nature, vol. 5(6), pages 756-763, June.
    3. Krajc, Marian & Ortmann, Andreas, 2008. "Are the unskilled really that unaware? An alternative explanation," Journal of Economic Psychology, Elsevier, vol. 29(5), pages 724-738, November.
    4. Schlösser, Thomas & Dunning, David & Johnson, Kerri L. & Kruger, Justin, 2013. "How unaware are the unskilled? Empirical tests of the “signal extraction” counterexplanation for the Dunning–Kruger effect in self-evaluation of performance," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 85-100.
    5. Calvin Blackwell, 2010. "Rational Expectations in the Classroom: A Learning Activity," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 10(2), pages 1-6, Fall.
    6. Ehrlinger, Joyce & Johnson, Kerri & Banner, Matthew & Dunning, David & Kruger, Justin, 2008. "Why the unskilled are unaware: Further explorations of (absent) self-insight among the incompetent," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(1), pages 98-121, January.
    7. Marian Krajc, 2008. "Are the Unskilled Really That Unaware? Understanding Seemingly Biased Self-Assessments," CERGE-EI Working Papers wp373, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    8. Gignac, Gilles E. & Zajenkowski, Marcin, 2020. "The Dunning-Kruger effect is (mostly) a statistical artefact: Valid approaches to testing the hypothesis with individual differences data," Intelligence, Elsevier, vol. 80(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dunning-Kruger effect; Boundary conditions; Tobit model.;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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