In 1995, McArthur Wheeler walked into two Pittsburgh banks and robbed them in broad daylight, with no visible attempt at disguise. He was arrested later that night, less than an hour after videotapes of him taken from surveillance cameras were broadcast on the 11 o’clock news. When police later showed him the surveillance tapes, Mr. Wheeler stared in incredulity. “But I wore the juice,” he mumbled. Apparently, Mr. Wheeler was under the impression that rubbing one’s face with lemon juice rendered it invisible to videotape cameras (Fuocco, 1996).
The Dunning-Kruger Effect
In 1999, two Cornell University researchers conducted a series of studies on how people perceive their own level of competence. The results should cause all of us to pause and engage in a bit of self-reflection.
David Dunning and Justin Kruger concluded that those who are really bad at something tend to believe that they are actually quite good at it. In other words, in order to appropriately assess our own expertise at something, we must already possess a certain amount of expertise.
We bring up the unfortunate affairs of Mr. Wheeler to make three points. … Perhaps more controversial is the third point, the one that is the focus of this article. We argue 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. Instead, like Mr. Wheeler, they are left with the mistaken impression that they are doing just fine. As … Charles Darwin (1871) sagely noted over a century ago, “ignorance more frequently begets confidence than does knowledge”.
It’s Not Just Mr. Wheeler!
Since its publication, Dunning and Kruger’s paper has become something of a cult classic. It certainly has far-reaching implications, not least for litigants and others embroiled in disputes.
One study of high-tech firms discovered that 32-42% of software engineers rated their skills as being in the top 5% of their companies. A nationwide survey found that 21% of Americans believe that it’s ‘very likely’ or ‘fairly likely’ that they’ll become millionaires within the next 10 years. Drivers consistently rate themselves above average. Medical technicians overestimate their knowledge in real-world lab procedures. In a classic study of faculty at the University of Nebraska, 68% rated themselves in the top 25% for teaching ability, and more than 90% rated themselves above average.
The Overconfidence Effect
Attorneys, mediators, arbitrators, and judges encounter a corollary to the Dunning-Kruger effect, namely inflated assessments of the strength of any given party’s case. This is also known as the overconfidence effect.
My favorite example of this is from my time as a volunteer small claims court mediator. In introducing the option of cost-free pre-trial mediation, the judge routinely asked every litigant in the courtroom “Who here believes that you are going to win?” More often than not, everyone raised their hand. The judge then bluntly stated, “Half of you are wrong.”
Similarly, litigants and other parties in mediation can overestimate the strength of their case and their chances of success. Sometimes, this is mere puffery, in order to attempt to achieve the best possible settlement outcome. At other times, however, it is apparent that a party’s assessment of their case may be flawed, and that the party has become anchored to an outcome that is likely unachievable.
This is not to say that those who are overconfident about litigation outcomes are unskilled – though sometimes, inexperience and overconfidence are indeed correlated – but rather, that our psychological tendencies can get in the way of good decision-making.
At least one study has shown that, when making decisions about whether to settle, Plaintiffs are wrong far more often than Defendants (61% versus 24%). However, when Defendants are wrong, their mistake costs them more (an average of $1.1 million versus $43,000). (“Study Finds Settling is Better Than Going to Trial”, New York Times, August 8, 2008.)
So, what can we do to avoid falling prey to our own inflated self-assessments?
Check Your Level of Confidence
Attorneys must effectively manage their clients’ relatively unskilled expectations by tempering that optimism with the reality of skill and experience. Mediators engage in “reality testing” and other strategies to assist clients in evaluating realistic options.
Both attorneys and mediators – of all skill levels – benefit greatly from applying our critical thinking skills to ourselves and everything else. Knowing that we are likely to be victims of overconfidence and the Dunning-Kruger effect, we may be able to guard against them by reviewing old knowledge, pursuing new knowledge, speaking to peers about our strategies, successes, and failures, and actively seeking constructive criticism.
Do Not Underestimate Others
Optimism about our skills, our abilities, and our chances of success is not in and of itself a bad thing. However, we all tend to perceive ourselves as above average. We then explain the fact that we cannot all be above average by assuming that others must be worse than us. “Being clueless about your own abilities is one thing. Misjudging others’ abilities is relatively more serious.” (Arstechnica.com)
Or, to quote an anonymous author: “When in doubt, ask. When not in doubt, ask. If you are not in doubt, you may be kidding yourself.”