I recently had the chance to read an advance copy of an outstanding book by Daniel Kahneman entitled Thinking, Fast and Slow. The book will be published this fall.

(Stockbyte)
Among the hundreds of interesting ideas in the book, there is one that I simply can’t get out of my head. Referring to how our minds work, Kahneman writes that not only are we sometimes “blind to the obvious,” but also we are “blind to our blindness.” For me, that one sentence summarizes a fundamental insight of his life’s work.
It’s one of those simple insights which is obvious when you think about it, but somehow incredibly easy to forget when mesmerized by the happenings of everyday life, leading to poor decision making.
Coming up with a good name for a problem is often an important part of coming up with a solution. So I’m thankful to Kahneman for planting the phrase “blind to my own blindness” in my brain. The next time I’m about to mindlessly make a terrible choice, I’m hoping that phrase will forcefully interject itself into my internal dialogue, causing me to think more clearly about my decision.
More likely, it will only be after the fact that I become aware that I was blind to my own blindness in a particular setting. At least I’ll have a succinct way of beating myself up.

See the Dunning-Kruger effect related article” Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self Assessments” in the Journal of Personality and Social Psychology, Vol. 77, No. 6, p.1121-1134
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What helps me a lot with this issue is to have a personal board of directors who have differing life experiences than I and who have orthogonal cognitive skills than I. I call them “Team WTF are you doing?”.
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A variation of the Dunning–Kruger effect, broadly speaking?
This sounds similar to Rumsfeld’s unknown unknowns.
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Seems alot like the “Invisible Gorilla” situation…..
I’d say that Dunning-Kruger is a specific case of this. I understand this to be a lot more like what Zizek calls “Unknown Knowns” referring to Rumsfeld’s famous taxonomy of military intelligence: “There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.” Zizek points out that what Rumsfeld excluded in his taxonomy are the “Unknown Knowns”: the things we know but do not acknowledge as such because other assumptions prevent us from doing so.
For example, as the US made the case for the Iraq war, our intelligence already “knew” that the WMD evidence was spurious yet decided to use it to justify the invasion.
we already knew that WMDs did not exist
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I always ask myself: “What would a SANE person do…?”
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Take a look at this article by Dan Ariely, which also reminds us how blind we are to our blindness! http://www.wired.co.uk/magazine/archive/2011/08/features/you-are-being-gamed?page=1