A Statistical Explanation of the Dunning-Kruger Effect

Tinbergen Institute Discussion Paper 2021-092/III

17 Pages Posted: 2 Nov 2021

See all articles by J.R. Magnus

J.R. Magnus

Vrije Universiteit Amsterdam, School of Business and Economics

Anatoly Peresetsky

National Research University Higher School of Economics

Date Written: October 04, 2021

Abstract

An explanation of the Dunning-Kruger effect is provided which does not require any psychological explanation, because it is derived as a statistical artefact. This is achieved by specifying a simple statistical model which explicitly takes the (random) boundary constraints into account. This model fits the data perfectly.

Keywords: Dunning-Kruger Effect, Boundary Conditions, Tobit Model

JEL Classification: A23, C24, C91, D84, D91, I21

Suggested Citation

Magnus, Jan R. and Peresetsky, Anatoly, A Statistical Explanation of the Dunning-Kruger Effect (October 04, 2021). Tinbergen Institute Discussion Paper 2021-092/III, Available at SSRN: https://ssrn.com/abstract=3951845 or http://dx.doi.org/10.2139/ssrn.3951845

Jan R. Magnus (Contact Author)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Anatoly Peresetsky

National Research University Higher School of Economics ( email )

17 Malaya Ordynka Street
20 Myasnitskaya Street
Moscow, 119017
Russia

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