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For many industry observers, 2023 will go down as the year that lab grown diamonds came of age. And as someone who had been forecasting this eventuality since 2016, I have enjoyed watching events occur that generally conform to my predictions made years ago. But I also find it fascinating that so many industry experts failed to properly anticipate what was going to happen, and so for this month’s article, let’s examine two fundamental psychological principals that when applied in concert may account for their failure to see what was coming.
You have probably heard the expression that someone “knows just enough to be dangerous”, an acknowledgement of the fact that people with a limited understanding of a specific topic may overestimate their competence in it. In the late 1990s, Cornell psychology professor David Dunning and his graduate student Justin Kruger conducted a series of studies examining scenarios in which poor performers in many social and intellectual domains seemed oblivious to deficiencies in their expertise, culminating in a landmark paper: “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments”. Journal of Personality and Social Psychology, 1999.
You can see the corresponding intellectual dynamics in the image: The Dunning-Kruger Effect Curve, which plots an individual’s feelings of Confidence versus actual Competence when learning a new subject. In the initial stages, the individual’s Confidence soars as they begin to understand rudimentary elements, culminating in the extremely dangerous scenario signifying their arrival at the top of “Mount Stupid”. Indeed, at this stage, while Confidence is at its zenith, actual Competence is still quite limited, especially if the topic is complex. And then suddenly, as a little more Competence is acquired, the individual realizes that they don’t know what they don’t know, precipitating a collapse into the “Valley of Despair”. At this stage, if the individual continues to study the topic and acquires higher levels of Competence, Confidence begins to be restored as they travel up the “Slope of Enlightenment” to arrive at a level of combined Competence/Confidence sufficient to allow them to hit the “Plateau of Sustainability”. At this stage, they may even achieve a “guru-like” level of understanding, where their knowledge of the subject matter enables them to infer answers intuitively, without discernible cognitive effort.
The four sequential stages in this journey (each section delineated by dots on the curve) can be summarized as follows:
You can see the corresponding intellectual dynamics in the image: The Dunning-Kruger Effect Curve, which plots an individual’s feelings of Confidence versus actual Competence when learning a new subject. In the initial stages, the individual’s Confidence soars as they begin to understand rudimentary elements, culminating in the extremely dangerous scenario signifying their arrival at the top of “Mount Stupid”. Indeed, at this stage, while Confidence is at its zenith, actual Competence is still quite limited, especially if the topic is complex. And then suddenly, as a little more Competence is acquired, the individual realizes that they don’t know what they don’t know, precipitating a collapse into the “Valley of Despair”. At this stage, if the individual continues to study the topic and acquires higher levels of Competence, Confidence begins to be restored as they travel up the “Slope of Enlightenment” to arrive at a level of combined Competence/Confidence sufficient to allow them to hit the “Plateau of Sustainability”. At this stage, they may even achieve a “guru-like” level of understanding, where their knowledge of the subject matter enables them to infer answers intuitively, without discernible cognitive effort.
The four sequential stages in this journey (each section delineated by dots on the curve) can be summarized as follows:
- Unconsciously Incompetent
- Consciously Incompetent
- Consciously Competent
- Unconsciously Competent
