The Dinning Krusher Impact: The Dunning-Kruger Effect

Question 1
Edward has fallen prey to what the Dunning-Kruger effect calls a ‘double curse’ in which a person such as Edward is meta-ignorant: “lacking skills depriving him of not only being unable to produce correct responses but also of the expertise necessary to surmise that the responses are not being produced” (Johnson, K., Ehrlinger, J., & Kruger, J. (2003). Dunning et al Dunning et al (2003)). After having Daisy and Jim leave the company, Edward simply chose to move from a partnership to being the sole owner without giving thought to why they have left. One of the reasons people such as Edward fail to recognize their incompetency is due to the “tendency to defend their sense of self-worth” (Dunning D, 2011) as he continues to think of himself as an ‘excellent business partner’ who possesses ‘all the skills and abilities’ to continue running the business by himself successfully. In order to
This involves interpreting and favoring information which confirms previously existing perceptions and biases about a person. Edward seems to recall Tom as ‘an outstanding young footballer’ creating a positive impression of him, and seeing as Tom graduated with ‘a very high ATAR and uses a lot of business jargon’, Edward’s previous beliefs about Tom being appropriately fit for the job are now further cemented. Research shows that confirmation bias causes decision makers to “ignore or downplay the negative features” (McShane et al 2016) of their decision, in which Edward can be seen ignoring the signs of Tom’s immaturity and lack of stability- by him dropping out of his degree, working multiple short-term jobs and lack of financial planning leading to him running out of money. Decision makers under confirmation bias, do not realize their mistakes until they “receive very clear and undeniable information to the contrary” (McShane et al 2016) i.e. until Tom performs poorly at his job as a Business