Professor David Dunning from Cornell University, along with numerous colleagues, has done fascinating and sometimes discouraging research on self-awareness. His most famous paper on the topic was published in 1999 with Kruger ... check-out the abstract of Unskilled and Unaware of it. I have known about it for a long time, but I have just discovered Dunning's book, Self-Insight: Roadblocks and Detours on the Path to Knowing Thyself. This is a pretty pure academic book, but it sure is fascinating, and should make all of us stop and pause when we feel supremely confident about ourselves. You can learn tidbits like people do a pretty bad job of guessing their IQ scores, are downright awful at rating their ability to catch other people's lies, that workers do a far worse job of assessing their own social skills than their superiors or peers, that in survey of thousands of high school seniors 70% of respondents rated their leadership ability as above average while only 2% rated their leadership ability as below average, and -- turning to my own profession -- that 94% of college professors say they do above average work.
Self-Insight also contains an update of research for the 1999 article -- the basic finding is that people with worst skill levels at diverse tasks (ranging from debating skill to having a good sense of humor) consistently overestimate their abilities by huge amounts. For example, people who had skill levels at the 12th or 13th percentile usually estimated that they were in the 60th percentile of performance. In contrast, people above the 50th percentile made far more accurate assessments -- although the most skilled people tended to underestimate their relative skill a bit.
The upshot of this rather famous work is that you should be wary of self-assessments in general, but especially wary of people who seem to be incompetent. As Dunning puts it, "The central contention guiding this research is that poor performers simply do not know -- indeed cannot know -- how badly they are performing. Because they lack the skills required to produce correct answers they also lack the skills to accurately judge whether their own answers are correct."
The book has all sorts of great research and I found it a lot more fun to read than most academic books, but be warned that it contains a lot of studies and such.