Our tendency to believe we know more than we do illustrates question 5 options: naturalistic observation. the placebo effect. overconfidence. the standard deviation.

Our tendency to believe we know more than we do illustrates is "overconfidence".

Overconfidence alludes to a biased method for taking a gander at a circumstance. When you are overconfident, you misinterpret your esteem, sentiment, convictions or capacities and you have more certainty than you should given the target parameters of the circumstance.  

Overconfidence can make a man encounter issues since he may not plan appropriately for a circumstance or may get into a perilous circumstance that he isn't prepared to deal with.