His research focuses on the psychology underlying human misbelief. In his most widely-cited work, he showed that people tend to hold flattering opinions of their competence, character, and prospects that cannot be justified from objective evidence—a phenomenon that carries many implications for health, education, the workplace, and economic exchange. He also examines how many of these same processes also injure judgments made by groups.
Dunning’s other research focuses on decision-making in various settings. In work on economic games, he explores how choices commonly presumed to be economic in nature actually hinge more on psychological factors, such as social norms and emotion. In particular, he documents that people trust complete strangers in situations in which the economic analysis would suggest no trust whatsoever.
Finally, Dunning explores how people’s preferences and wishes distort their judgements and conclusions. In past work, he has shown how the influence of motivated reasoning extends even down to shape perceptual experience, such as vision and hearing.