Self Deception
We bend the facts to fit our self-image, perpetuating a view of ourselves that is often more positive than accurate.
We regularly write revisionist histories and paint unrealistically glossy portraits of ourselves.
Rationalization is a core component of self-deception. It's through rationalization that the smoker convinces herself that her habit isn't that unhealthy. It's rationalization when a customer keeps the extra change the cashier mistakenly hands back and justifies his decision by reflecting that the store is marking up prices to begin with. Or when someone refers to a banana they pick up and eat while grocery shopping as ‘the price of doing business’ with them.
Ironically, the better-than-average effect is most exaggerated among the least competent. The worse we are at something, the better we often think we are.
Almost anyone can drive a car or exhibit decent social skills, and amusingly high numbers of people believe that they're great at these things. But in domains where general levels of societal proficiency are lower, let's say, public speaking or running for mayor, the bias isn't nearly as prevalent.
Psychology Today
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