The concept of illusory superiority has been a subject of psychological research for decades. One of the earliest recognitions of this bias can be traced back to the 1960s, with studies focused on self-assessment and social behavior. However, it gained significant attention in the late 20th century, especially through the work of David Dunning and Justin Kruger in the late 1990s. Their research, which led to the formulation of the Dunning-Kruger Effect, which is a form of Illusory Superiority, found that individuals with lower ability at a task are more likely to overestimate their ability than individuals who are actually competent at the task.

The desire for a positive self-image, a lack of self-awareness, and the societal pressure to appear competent all contribute to the development of illusory superiority. Recent research shows that this bias is influenced by several factors, including social upbringing, cultural norms, and individual psychological needs. As an example, some recent studies have found that people in East Asian cultures often rate their abilities lower than they are, to focus on self-improvement and maintain good relationships with others.

Unfortunately, in the software industry, this is something we see pretty often. For example, a UX designer might skip usability studies or ask for a design critique believing their designs are easier to use than they are. Founders may assume mistakes made by other startups won’t apply to them, ignoring key market research or user feedback. This can lead to misaligned product strategies and eventual failure in the market. Engineers may overestimate their abilities, possibly skipping things like code review. This could result in products full of bugs that don’t meet quality standards.