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.

For example, someone who is not good at math may believe that they are better at math than they actually are. This can lead them to make poor decisions, such as choosing a financial investment that is too risky.

People with high ability levels tend to underestimate their abilities. This is because they are more aware of their own limitations and are more likely to second-guess themselves.