We are all the best person we know and, in general, tend to think we're pretty unbiased as well. Illusory superiority can help us keep a healthy, optimistic attitude, but it can also prevent us from doing something great.
Recently Derek Sivers, founder and former president of CDBaby, posted about the benefits of assuming you're below average. The suggestion is this: If you don't assume you're all that great you'll be much more open to learning new things, asking more questions and approaching situations with the sort of humility that leads to considering a good idea you may have otherwise thought to be stupid.
Illusory superiority basically comes down to a bias about yourself that causes you to think you're better than you are in a certain situation. It's a brand of positive thinking that can cause you trouble. (As we've already seen, positive thinking can cause unnecessary stress.) This trouble is called the Dunning-Kruger effect, which occurs when a person overrates their ability and ends up making poor decisions as a result.
The Dunning-Kruger effect generally refers to incompetent people who, because of their lack of knowledge, are also incapable of realising their mistakes due to a lack of metacognitive ability — the ability to know about knowing — but you don't have to be incompetent to overestimate your greatness. Many times we can try to psych ourselves up and tell ourselves how great we are in order to make ourselves feel better. This may have a positive emotional effect but isn't necessarily the right approach. Next time you have to assess your ability in a particular area, consider that you might not be as good as you think you are. Instead, give yourself the opportunity to listen and be open to new ideas. You may just learn something you'd have otherwise missed.
I assume I'm below average [Derek Sivers]