"Complete strangers armed only with scant information about an individual can predict that person's skills and abilities almost as well as he or she can, despite the fact that the individual has a lifetime of self-information to draw upon," the researchers say, pointing to a study in which participants were asked to estimate the intelligence of a stranger in a tape recording who had just read a weather report, and then walked out of the room.
"Participants who viewed these tapes -- and who had no additional information -- provided ratings of intelligence that predicted the targets' scores on standard IQ tests almost as well as the targets' self-ratings," the study reports.
Much of the evidence lies in the fact that we can't all be above average, yet many studies show most of us think we are.
In one study of nearly a million high school seniors, 70 percent said they had "above average leadership skills, but only 2 percent felt their leadership skills were below average."
Another study found that 94 percent of college professors think they do above average work.
And in another study, "when doctors diagnosed their patients as having pneumonia, predictions made with 88 percent confidence turned out to be right only 20 percent of the time."
Self-deception can have surprising results. One study reveals that women often say they would respond to sexual harassment with anger and assertiveness. But in fact "the dominant emotion of people placed in harassing situations turns out to be fear, and victims end up responding to harassing behaviors with silence and diversionary talk rather than confrontation," the researchers say.
So they were quite wrong in what they thought they would do under those very difficult circumstances.
Believing you're the smartest kid on the block can contribute to defeat, the researchers argue. You're more likely to stick with ideas that clearly don't work, and ignore the suggestions from others.
So why do we so often paint ourselves in a favorable light, even when we are confronted with very convincing evidence that we are wrong? Partly because we want so much to believe we're right.
"People are often motivated to reach flattering conclusions about themselves and their place in the world," the researchers conclude. "Thus, they mold, manage and massage the feedback the world provides them so that they can construe themselves as lovable and capable people."
But they're not fooling the people around them as much as they are fooling themselves.
Yet if "flawed self-assessment" is so pervasive, maybe we do it because we need it.
Maybe we've just got to believe we're above average, like all the kids at Garrison Keillor's Lake Wobegon.
Lee Dye's column appears weekly on ABCNEWS.com. A former science writer for the Los Angeles Times, he now lives in Juneau, Alaska.