Excessive Self-Regard Tendency
We systematically overestimate our abilities and prospects.
Key Principle
Seek honest, external feedback and calibrate against objective measures.
Understanding Excessive Self-Regard Tendency
Most people believe they're above average in intelligence, driving ability, ethics, and judgment. This is mathematically impossible—but psychologically universal. We consistently overrate our abilities and underrate our weaknesses.
This tendency extends to what we're associated with. Our children are smarter, our ideas are better, our purchases are wiser, our company is more valuable. The "endowment effect" causes us to overvalue things simply because they're ours.
In business, this manifests as founders overvaluing their companies, leaders overestimating their strategic abilities, and teams believing their plans are more robust than they are.
Real-World Examples
- 90% of drivers believe they're above average.
- Founders consistently overvalue their startups in funding negotiations.
- Executives overestimate the success probability of their initiatives.
- People rate their own ethics and objectivity higher than peers rate them.
How to Apply This
Actively seek critical feedback from people who will be honest
Compare your predictions to actual outcomes over time
Get independent valuations for important decisions
Assume you're more biased than you think you are
Common Mistakes to Avoid
- Dismissing criticism as "haters" or jealousy
- Surrounding yourself with people who confirm your self-image
- Not tracking predictions against outcomes
- Believing you're uniquely immune to common biases
Notable Quotes
"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."
— Mark Twain