The near-universal habit of overrating our own abilities, judgments, and even our possessions and children — merely because they are ours.
People overappraise their own decisions, their own possessions, and their own children — not because the evidence supports it, but simply because ownership itself inflates value in the mind that holds it.
In a 1981 study, psychologist Ola Svenson found that a large majority of surveyed drivers rated themselves as safer and more skillful than the median driver — a statistical impossibility that illustrates how self-regard inflates self-assessment even on measurable skills.
In a 1990 experiment, Daniel Kahneman, Jack Knetsch, and Richard Thaler gave half of a group coffee mugs and found that owners demanded roughly twice as much to sell their mug as buyers were willing to pay for an identical one — mere ownership inflating perceived value.
Long-running industry comparisons such as S&P's SPIVA reports have repeatedly shown that most actively managed funds underperform their benchmark index over long horizons, even as individual investors and managers persistently overrate their own ability to beat the market.
Seek the outside view: compare your situation to the base rate for people in similar circumstances, not to your own optimism.
Solicit criticism from people who have no incentive to spare your feelings.
Run a pre-mortem — imagine the decision has already failed, and ask why.
Keep a written decision journal so your track record is measured by outcomes, not by memory.
Apply the same evaluative rigor to your own ideas, possessions, and children that you would apply to anyone else's.
Because it is one's own, it seems better than it is — the mind grades on a curve the moment ownership enters the picture.