The Dunning-Kruger effect is a cognitive bias defined as the tendency for people who lack knowledge, skill or experience in a specific area or topic to overestimate their abilities in said area. There is a linear relationship observed such that the worse one's objective performance, the larger their overestimation tends to be. Only at the highest levels of ability do people tend to actually underestimate their performance.
Many hypotheses have been proposed to explain the effect. One popular hypothesis is that those with low ability lack awareness of the full depth of an area or topic - they don't know what they don't know. As ability increases, so does awareness of the regions in which one is deficient, allowing them to account for this better in their self-assessment.
The other hypotheses are a bit more complex to describe and so I will avoid the temptation to overestimate my ability to do them justice in this brief answer :)
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