The Kruger-Dunning effect is a cognitive bias where individuals with low ability at a task overestimate their skills, while those with high ability may underestimate their competence. This phenomenon occurs because less skilled individuals lack the knowledge to recognize their own limitations, leading to inflated self-assessments. Conversely, highly skilled individuals often assume that tasks they find easy are also simple for others, causing them to undervalue their expertise. This effect highlights the importance of self-awareness and feedback in personal and professional development, as accurate self-assessment can lead to improved performance and learning.