Question

Suppose I did a poll of my students in my Economics courses. I asked each student to rate himself/herself relative to the other students in class. I then found 90% of students rated themselves above average. What type of bias is relevant here?

Answer 1

 

Abstract

Most people think they’re better than the average person: that they’re smarter, more likeable, more attractive.

Maybe most people think they’re better than average, but you’re not as big-headed as most people. Maybe you’re more modest than the average person or maybe your modesty is just another trait you’re overestimating.

This tendency to think of ourselves as “above average” is a well-established bias.

A closely related bias is the Dunning-Kruger effect, where incompetent or unskilled people fail to recognise their own incompetency.

In general, students do rating themselves significantly higher than average on positive traits such as honesty, persistence and originality and lower than average on negative ones such as hostility, vanity and reasonableness.

Below are the reasons for this type of focalism bias

Average comparision appears to carry some pretty negative factors such as calling someone average is a bit like saying they’re nothing special.

So it’s only natural that we tend not to want to think of ourselves as “merely” average. It’s also been suggested that the focalism bias may play a part: a tendency to assign greater to significance to whatever is the focus of attention.

So when comparing ourselves to others, we may view our own positive traits as more significant than those of others.

This means we end up overestimating our abilities or characteristics in relation to those of other people

The problem is that if we overestimate how great we are, how smart we are, we’ll also overestimate our chances of being successful.

People who think they’re better than average also tend to think that good things are more likely to happen to them than others, bad things less likely.

In conclusion, The more we overestimate ourselves, the more likely we are to take unwarranted and even dangerous risks.

We’re also likely to overestimate our chances of success in a career. We’ll think we’re more likely to rise to the top of a big firm, to become an influential policy maker or academic, or to start a successful business.