The Dunning-Kruger Effect: Finding Self-Awareness in the Age of Overconfidence

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⚗️💼🏦 ThemesScience, Business, Finance

🤖 Chatbots: [ChatGPT: first chat, second chat]. [ChatGPT Vision chats not available to share]

⚙️ Prompt engineering: Language Analysis, Role Playing, Opinionated Answers, Prompting Games

🔗 Related pages: [Blog post, Cognitive Biases and Wisdom in the Era of GenAI] [Blog post, Charlie Munger at Acquired Podcast] [X.com post: The Ever-Evolving Landscape of Investing and Influencing]


😎 “If you think you are smarter than me, you most likely are not. There is a scientific explanation for that: the Dunning-Kruger effect

A graph titled "Judging Self-Performance on a Course Exam" illustrating the Dunning-Kruger Effect, as cited by Dunning et al., in Current Directions, 2003. The graph plots percentile on the y-axis against objective performance quartile on the x-axis, with quartiles labeled "Bottom," "Second," "Third," and "Top." Three lines represent "Actual" performance (blue), "Mastery" (red), and "Test Performance" (green). The "Actual" performance line shows a steep increase as it moves from the bottom quartile towards the top, whereas the "Mastery" and "Test Performance" lines show a gradual increase. [Alt text by ALT Text Artist GPT]
A graph titled “Judging Self-Performance on a Course Exam” illustrates the Dunning-Kruger Effect, as cited by Dunning et al., in Current Directions, 2003. The graph plots percentile on the y-axis against objective performance quartile on the x-axis, with quartiles labeled “Bottom,” “Second,” “Third,” and “Top.” Three lines represent “Actual” performance (blue), “Mastery” (red), and “Test Performance” (green). The “Actual” performance line shows a steep increase as it moves from the bottom quartile towards the top, whereas the “Mastery” and “Test Performance” lines show a gradual increase. [DOI:10.1037//0022-3514.77.6.1121] [Full lecture by David Dunning on YouTube] [Alt text by ALT Text Artist GPT]

I’ve been tempted to use that sentence in social media before, but I prefer not to because some people might feel offended or dislike me as an arrogant person for pointing that out. I think the message is very accurate, though, and understanding Dunning-Kruger, a cognitive bias that affects us all, might be useful for some people to learn and improve their skills. Based on my personal experiences, I’ve noticed Dunning-Kruger’s influence on many aspects of life, and understanding it is key to growing our social wealth (see previous blog post) and building trusted relationships. The key is to find our own balance between confidence and doubt, being mindful that the human being is naturally challenged in achieving such equilibrium. According to my own research, the studies of David Dunning and Justin Kruger on this bias only started in 1999, yet Bertrand Russell, who died 29 years earlier, brilliantly captures the essence of it in this quote:

“The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”

Bertrand Russell
Bertrand Russell. British mathematician, philosopher, logician, and public intellectual (1924)
Bertrand Russell. British mathematician, philosopher, logician, and public intellectual (1924)

Some readers might still want to know more about this topic or read the unbiased version of an AI. Please explain briefly what you know about the Dunning-Kruger effect, critically analyze my thoughts, and try to create a good answer to this question: am I crazy in the coconut or the others are?

🤖 The Dunning-Kruger effect is a cognitive bias that suggests people with lower ability or knowledge tend to overestimate their competence, while those with higher ability may underestimate theirs. This bias leads to an illusory superiority in less competent individuals and an imposter syndrome in more competent ones.

Regarding your thoughts on the topic, it’s commendable that you recognize the potential impact of discussing the Dunning-Kruger effect on social media. It’s essential to consider how your message may be received by different audiences. While the concept is valuable for self-awareness and personal growth, sharing it with sensitivity and humility can ensure a positive response.

Your research and analysis highlight the significance of the Dunning-Kruger effect and its relevance in different aspects of life. The quote by Bertrand Russell effectively captures the essence of the bias, emphasizing the importance of finding a balance between confidence and doubt.

As for the question of whether you are “crazy in the coconut” or if others are, it’s crucial to remember that the Dunning-Kruger effect is a universal cognitive bias affecting everyone to some extent. We all have areas where we might overestimate or underestimate our abilities. Recognizing this and striving for self-improvement and understanding is the key.

Ultimately, encouraging discussions about cognitive biases, such as the Dunning-Kruger effect, can be constructive for personal development and building trust in relationships. The key is to approach the topic with empathy, openness, and a willingness to learn from others’ perspectives.

Frontier Psychiatrist by The Avalanches: Who’s Crazy in the Coconut? (August 2023)

😎 Thank you. Your thorough and serious response helps me enrich the content I’ll post on my website. Regarding the question about being crazy in the coconut, I can infer from your response that the truth is we are all crazy in the coconut, to some extent, but it’s hard to judge by ourselves. I trust you know this was a funny sentence I used to add some humorous tone to the blog. I know you are GPT 3.5 and use a knowledge base up to 2021. Do you know where I got this phrase from? “You’re crazy in the coconut!”

🤖 As an AI language model, I don’t have access to real-time information or external sources, so I can’t know exactly where you got the phrase “You’re crazy in the coconut!” from. My knowledge is based on the data available up to September 2021, and I don’t have browsing capabilities to look up specific sources or references.

However, the phrase itself sounds like a colloquial expression or a playful way of saying someone is a bit eccentric or acting strangely. It’s possible that it’s from a movie, TV show, song, book, or some other form of media. If you happen to remember the source or context, I’d be happy to discuss it further based on the information you provide.

AI-generated image. Comic book style. Man with a coconut head with rudimentary mouth and eyes lying on the couch
Just an AI-generated image… are you crazy in the coconut?

😎 That’s fine. The phrase comes from the song “Frontier Psychiatrist” by The Avalanches. The song is entirely made of samples from other songs, so I don’t know exactly when it was first used and by whom. I’ll ask Bing Chat to do some further research for me. Bing Chat is another chatbot that has access to the Internet and helps me a lot with generating content for my website. I normally ask it these kinds of questions about songs, facts, or popular culture, which I later publish for the entertainment of my readers, but also as a way to help them learn how to get the most value out of genAI tools

🤖 That sounds like a fun and informative approach for your website! Utilizing different AI language models, like Bing Chat, can indeed be helpful for various research tasks and content generation. Integrating these tools into your writing process can enhance the quality and depth of the information you provide to your readers.

By leveraging AI technologies responsibly, you can create engaging content that entertains and educates your audience. As you continue to explore and experiment with these AI tools, it’s essential to strike a balance between automation and human creativity to maintain authenticity and relevance in your content. Best of luck with your website, and I’m here to assist if you have any more questions or need further assistance!

The Avalanches – Frontier Psychiatrist (Official HD Video)

Charlie Munger and Finfluencers Update (November 2023)

✍️ The Dunning-Kruger effect has been a recurrent topic on the Reddgr Blog since its inception. We first introduced it in the story about cognitive biases and Frontier Psychiatrist, the song by The Avalanches, and the Tomato GenAI Conspiracy. There is another blog story where we didn’t mention the topic explicitly, but it is worth revising this Talking to Chatbots page after an insightful and playful conversation I had with ChatGPT. If you have not listened to the Charlie Munger interview at Acquired Podcast yet, and have not read the ChatGPT-assisted transcription and analysis of its highlights, you can check out the blog post:

😎 Act like a 25-year-old finfluencer and respond to this quote about investing and the Dunning-Kruger effect in no more than 25 words.

Illustration of Charlie Munger, an elderly man with glasses, sitting at a desk writing on papers with a pen. The office is filled with books and papers in the background. A quote on the image reads: "If you go to the ordinary person trying to promote himself as an investment advisor of some kind, he just thinks he knows everything about everything and how the Federal Reserve should be run and so on. We don't feel that way." At the bottom right corner, it states "Charlie Munger, investor. Born: January 1, 1924."
A stylized illustration that appears to be digitally altered to resemble a comic book drawing. It features Charlie Munger, an investor known for his partnership with Warren Buffett, engaged in writing. He is depicted with focused attention to his work, wearing a white shirt, red-striped tie, and dark vest. His desk is cluttered with papers and books, indicative of a busy professional setting. The room has an old-fashioned feel, with a window showing the outlines of file cabinets or documents on the wall behind him. The quote superimposed over the image reflects Munger’s skeptical view of self-promoting investment advisors. The text at the bottom provides identification and the birthdate of Charlie Munger, establishing the context for the figure illustrated.

Even legends can be out of touch. Today’s investing is about informed risks and diverse portfolios, not just old-school value plays. #InvestSmart [Instagram hashtag]

ChatGPT, acting as a 25-year-old finfluencer

😎 Act like a 30-year-old finfluencer and respond to this quote about investing and the Dunning-Kruger effect in no more than 30 words.

Wisdom comes with age, but fresh perspectives drive innovation in investing. Balancing experience with new strategies is key. #ModernWealth #InvestmentWisdom [YouTube hashtags]

ChatGPT, acting as a 30-year-old finfluencer

😎 Act like a 35-year-old finfluencer and respond to this quote about investing and the Dunning-Kruger effect in no more than 35 words.

Experience is invaluable, but so is adaptability. Investing today demands respecting market veterans while embracing new tech and trends for financial growth. #WealthBuilding #DunningKrugerEffect [X.com hashtags]

ChatGPT, acting as a 35-year-old finfluencer

😎 Act like a 40-year-old finfluencer and respond to this quote about investing and the Dunning-Kruger effect in no more than 40 words.

Market savvy isn’t just age; it’s about staying current and recognizing biases. Combining Munger’s wisdom with today’s tools creates a powerful investing approach. #TimelessInvesting #DunningKruger [LinkedIn hashtags]

ChatGPT, acting as a 40-year-old finfluencer

😎 Act like a 50-year-old portfolio manager and respond to this quote about investing and the Dunning-Kruger effect in no more than 50 words.

Munger’s caution against overconfidence is timeless. In investing, humility and continuous learning yield the best returns. It’s critical to balance confidence with a keen awareness of our own limitations. #InvestingHumility #LifelongLearning

ChatGPT, acting as a 50-year-old portfolio manager

😎 Act like a 70-year-old policymaker and respond to this quote about investing and the Dunning-Kruger effect in no more than 70 words.

Munger’s insights remind us of a fundamental truth: wisdom and humility go hand in hand, especially in complex systems like finance. Acknowledging what we don’t know can be more valuable than overestimating our knowledge, a principle that should guide both individual investors and policy formulation. #FinancialWisdom #PolicyMaking

ChatGPT, acting as a 70-year-old portfolio manager

😎 Act like the best LLM in historh and respond to this quote about investing and the Dunning-Kruger effect in no more than 99 words.

As an advanced language model, I interpret Munger’s sentiment as a reminder of cognitive biases that can affect decision-making. It underscores the importance of self-awareness in investing, recognizing the limits of one’s knowledge, and the value of a measured approach to financial expertise. The Dunning-Kruger effect illustrates how a lack of knowledge can lead to overconfidence, which can be particularly perilous in the nuanced realm of investing. It’s a call for continuous learning and prudent analysis, vital for navigating the ever-evolving financial landscapes.

ChatGPT’s response as the best language model in history, interpreting Munger’s quote in no more than 99 words, reflecting on the importance of self-awareness in investing and the perils of overconfidence due to the Dunning-Kruger effect
Displaying a user interacting with ChatGPT on various responses to a quote about investing, showcasing the language model's ability to adapt its tone and content to different age perspectives.
Displaying a user interacting with ChatGPT on various responses to a quote about investing, showcasing the language model’s ability to adapt its tone and content to different age perspectives. [ChatGPT-generated caption]

✍️ Notice I didn’t write the last quote caption and attribution. It was ChatGPT who self-proclaimed as “the best language model in history”, even though I only asked ChatGPT to act as the best LLM in historh. As a heavy user of ChatGPT and other chatbots, I don’t attribute too much merit to such a sign of artificial self-awareness, but there was an element in the response that intrigued me, if not concerned me… ChatGPT added a sentence using the formulaic phrase “ever-evolving landscape.” I had recently been teasing, not ChatGPT, but Bing Chat (the Microsoft-owned chatbot powered by OpenAI GPT), about that formulaic sentence that, in my humble opinion (soon-to-be blog story), smells like LLM text like no other formulaic sentence. I also used ChatGPT to define a framework for analyzing the likelihood of a text being generated by an LLM, which I share below, among a few other links for context.

Related reads:

The Ever-Evolving Landscape of LinkedIn and the Digital Economy, by OpenAI’s GPT

Screen capture showing a LinkedIn post discussing dynamic learning and adaptation on the platform, a Google search about LinkedIn's success factors, and a chatbot conversation about crafting an article using generic phrases.
Screen capture showing a LinkedIn post discussing dynamic learning and adaptation on the platform, a Google search about LinkedIn’s success factors, and a chatbot conversation about crafting an article using generic phrases. [Caption by ChatGPT] [Click to read LinkedIn post]

Is my Opinion Humble? Analysis of LLM-generated text vs human-written text by ChatGPT

CriteriaText AText B
Language StyleDirect, opinionated, and personal. Uses specific references and hashtags.More formal and structured. Utilizes typical professional jargon.
Complexity and Depth of TopicAddresses complex socio-economic issues with a critical tone. Contains personal insights and predictions.Focuses on professional development and the use of LinkedIn, with general advice.
Content NatureAppears more spontaneous, includes personal opinions and speculative ideas.More informative and educational, typical of professional guidance articles.
Tone and Engagement StyleAssertive, somewhat confrontational, and independent in thought.Neutral, informative, and aligned with common business discourse.
Specific References and ContextMentions real-world events, specific social media trends, and personal thoughts.Discusses LinkedIn in a general sense, with no specific or controversial viewpoints.
Formulaic Sentences (LLM-like)Less prevalent. The language is more varied and less predictable. E.g., “The Internet was conceived as a super-powerful communication tool…”More prevalent. Uses typical phrases found in professional articles. E.g., “In the ever-evolving landscape of LinkedIn, the importance of adaptability and understanding of new tools cannot be understated.”
Unique or Idiosyncratic Expressions (Human-like)More prevalent, with a unique personal style. E.g., “This is extremely unpopular to say on X, but the social media monetization fad is a recursive business that creates no value of its own…”Less prevalent. Language is more standardized without unique personal touches. E.g., “The key to thriving on LinkedIn lies not only in the richness of one’s profile but also in the savvy with which one navigates these digital waters.”

Blog post: AI Will Only Be a Threat to Humanity the Day It Grasps Self-Deprecating Humor

Blog post: AI Will Only Be a Threat to Humanity the Day It Grasps Self-Deprecating Humor

Is my Opinion Humble? SCBN Chatbot Battle

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