Week 1:
Unskilled and unaware of it: How Difficulties in Recognizing One's Own Incompetence Lead to
Inflated Self-Assessments (Kruger 1999)
Goal: this article dives into the Kruger-Dunning effect which states that people generally
overestimate their abilities in social and intellectual domains, but as people become more skilled in
these domains their metacognitive ability to realize their flaws increases and thus the recognition of
their limitations also increases.
This article essentially states that when people are incompetent in the strategies they adopt to
achieve success and satisfaction, they suffer a dual burden: Not only do they reach erroneous
conclusions and make unfortunate choices, but their incompetence robs them of the ability to
realize it. Thus the skills that make someone competent in a certain domain are often the same skills
necessary to evaluate competence in that domain (of oneself or of others). Therefore people often
lack metacognition, which refers to the ability to know how well one is performing and the ability to
recognize competence in others.
Based on the aforementioned findings the study predicts that incompetent individuals will
dramatically overestimate their ability performance relative to objective criteria (study 1), will be
less able to recognize competence when they see it (in others as well as themselves) due to a lack of
metacognitive skills (study 2), will be less able to gain insight into their true level of performance on
the basis of social comparison information due to their inability to recognize competence in others
(study 3) and finally, the incompetent can gain insight into their shortcomings by making themselves
more competent, which provides them with metacognitive skills to do so (study 4).
They found in study 1 which focused on the ability to recognize humorous jokes that people
generally overestimated their abilities to do so and that incompetent people overestimated their
abilities more so, relative to their peers.
In study 2 it was found that in the domain of logical reasoning incompetent people were more
miscalibrated as to their actual performance on tests relative to others and as to how many
questions they got right themselves.
Study 3 found that also in the domain of grammar people tend to overestimate their ability and
performance relative to objective criteria (phase 1). The second phase of the study was used to test
if incompetent people were also less able to recognize competence in other people. It was found
that incompetent people were relatively unable to recognize competence in others and were
therefore also less able to use this social comparison information to gain insight into their own flaws.
Study 4 found that training provided incompetent individuals with the metacognitive skills to realize
they had performed poorly, which reduced the miscalibration of their ability estimates.
Throughout the studies it was also found that competent people tended to underestimate their
abilities, falling prey to the false-consensus effect, the believe that if they performed well that others
must have also performed well, thus when confronted with actual social comparison evidence they
adjusted their assessments accordingly. The fact that incompetent people fail to learn that they are
unskilled is in a way because of the failure of feedback (‘if you don’t have something nice to say,
better not say anything at all), which robs them of learning experiences. They are also shown to not
be able to learn from social comparison evidence (study 3).
, Nudge your customers toward better choices (Goldstein 2008)
Goal: this article sets out to explain the ideas behind nudging and choice architecture (through for
example designing smart default options) that can be put into practice for companies. It does so by
explaining the taxonomy of default types, how to apply each type for maximum advantage and how
to avoid the pitfalls of ill-considered defaults.
Choice architecture: the design of environments in which decisions have to be made in order to
influence those decisions.
Defaults can serve as manufacturer recommendations, which most people are more than willing to
accepts. An alternative to defaults is forced choice which requires would-be customers to make
active choices or be denied access to the product or service. Below is the taxonomy on the different
types of defaults that can be used by organizations.
Mass defaults: these defaults apply to all customers of a product or service, without taking
customers’ individual characteristics or preferences into account. They are very useful when the
majority of customers can reliably be expected to prefer one basic configuration or to benefit from
the seller’s recommendations. In cases where the seller lacks personal information about a customer
this may be the seller’s only option.
Benign default: this type of default represent the company’s best guess (without preference
information) about which product or service agreement would be acceptable to most
customers and would pose the least risk to the firm and the customers.
Random default: arbitrarily assign customers to one of several default configurations. This
could be used as experimental tools to find out preferences allowing them to migrate from
using mass defaults to personalized defaults.
Hidden option: presents a single default configuration as the customer’s only choice, when
alternatives do exist.
Personalized defaults: these defaults reflect individual differences and can be tailored to better meet
customers’ needs. These are a good choice when customer information is readily available as they’re
more likely to satisfy customer needs.
Smart defaults: these defaults apply what is known about an individual customer or segment
to customize settings in a way that is likely to be ideal for the customer and the company (or
at least is a better fit than a mass default would be). The data that smart defaults use include
demographic or geographic variables, or even measurements taken by a product itself.
Persistent defaults: assume that a customer’s past choices are the best predictor of future
preferences and use those past choices as guidelines for defaults. This can be annoying
when preferences have changed though.
Adaptive defaults: dynamically update based on current, often real-time, decisions that a
customer has made.
Unskilled and unaware of it: How Difficulties in Recognizing One's Own Incompetence Lead to
Inflated Self-Assessments (Kruger 1999)
Goal: this article dives into the Kruger-Dunning effect which states that people generally
overestimate their abilities in social and intellectual domains, but as people become more skilled in
these domains their metacognitive ability to realize their flaws increases and thus the recognition of
their limitations also increases.
This article essentially states that when people are incompetent in the strategies they adopt to
achieve success and satisfaction, they suffer a dual burden: Not only do they reach erroneous
conclusions and make unfortunate choices, but their incompetence robs them of the ability to
realize it. Thus the skills that make someone competent in a certain domain are often the same skills
necessary to evaluate competence in that domain (of oneself or of others). Therefore people often
lack metacognition, which refers to the ability to know how well one is performing and the ability to
recognize competence in others.
Based on the aforementioned findings the study predicts that incompetent individuals will
dramatically overestimate their ability performance relative to objective criteria (study 1), will be
less able to recognize competence when they see it (in others as well as themselves) due to a lack of
metacognitive skills (study 2), will be less able to gain insight into their true level of performance on
the basis of social comparison information due to their inability to recognize competence in others
(study 3) and finally, the incompetent can gain insight into their shortcomings by making themselves
more competent, which provides them with metacognitive skills to do so (study 4).
They found in study 1 which focused on the ability to recognize humorous jokes that people
generally overestimated their abilities to do so and that incompetent people overestimated their
abilities more so, relative to their peers.
In study 2 it was found that in the domain of logical reasoning incompetent people were more
miscalibrated as to their actual performance on tests relative to others and as to how many
questions they got right themselves.
Study 3 found that also in the domain of grammar people tend to overestimate their ability and
performance relative to objective criteria (phase 1). The second phase of the study was used to test
if incompetent people were also less able to recognize competence in other people. It was found
that incompetent people were relatively unable to recognize competence in others and were
therefore also less able to use this social comparison information to gain insight into their own flaws.
Study 4 found that training provided incompetent individuals with the metacognitive skills to realize
they had performed poorly, which reduced the miscalibration of their ability estimates.
Throughout the studies it was also found that competent people tended to underestimate their
abilities, falling prey to the false-consensus effect, the believe that if they performed well that others
must have also performed well, thus when confronted with actual social comparison evidence they
adjusted their assessments accordingly. The fact that incompetent people fail to learn that they are
unskilled is in a way because of the failure of feedback (‘if you don’t have something nice to say,
better not say anything at all), which robs them of learning experiences. They are also shown to not
be able to learn from social comparison evidence (study 3).
, Nudge your customers toward better choices (Goldstein 2008)
Goal: this article sets out to explain the ideas behind nudging and choice architecture (through for
example designing smart default options) that can be put into practice for companies. It does so by
explaining the taxonomy of default types, how to apply each type for maximum advantage and how
to avoid the pitfalls of ill-considered defaults.
Choice architecture: the design of environments in which decisions have to be made in order to
influence those decisions.
Defaults can serve as manufacturer recommendations, which most people are more than willing to
accepts. An alternative to defaults is forced choice which requires would-be customers to make
active choices or be denied access to the product or service. Below is the taxonomy on the different
types of defaults that can be used by organizations.
Mass defaults: these defaults apply to all customers of a product or service, without taking
customers’ individual characteristics or preferences into account. They are very useful when the
majority of customers can reliably be expected to prefer one basic configuration or to benefit from
the seller’s recommendations. In cases where the seller lacks personal information about a customer
this may be the seller’s only option.
Benign default: this type of default represent the company’s best guess (without preference
information) about which product or service agreement would be acceptable to most
customers and would pose the least risk to the firm and the customers.
Random default: arbitrarily assign customers to one of several default configurations. This
could be used as experimental tools to find out preferences allowing them to migrate from
using mass defaults to personalized defaults.
Hidden option: presents a single default configuration as the customer’s only choice, when
alternatives do exist.
Personalized defaults: these defaults reflect individual differences and can be tailored to better meet
customers’ needs. These are a good choice when customer information is readily available as they’re
more likely to satisfy customer needs.
Smart defaults: these defaults apply what is known about an individual customer or segment
to customize settings in a way that is likely to be ideal for the customer and the company (or
at least is a better fit than a mass default would be). The data that smart defaults use include
demographic or geographic variables, or even measurements taken by a product itself.
Persistent defaults: assume that a customer’s past choices are the best predictor of future
preferences and use those past choices as guidelines for defaults. This can be annoying
when preferences have changed though.
Adaptive defaults: dynamically update based on current, often real-time, decisions that a
customer has made.
