We all care about what other people think of us. So much so, that we often devote significant amounts of time and mental energy to figuring out what kind of impression we are making on other people.
Despite being so involved in thinking about what others are thinking about us, we nonetheless don't always do the best job anticipating these thoughts correctly. For example, we often find ourselves believing that we left a much worse impression than we really did (first dates are known for this), and we just as frequently err on the other end (first dates are also known for this).

Part of interpreting the impression we leave with others is obviously interpreting the feedback these others give us, but oftentimes this feedback might be too ambiguous to be really useful. For example, you might give a presentation and find the audience moderately clapping afterward. Does that mean, they moderately liked your talk, or is it just a customary thing to do? Or at that same talk, you might find a member of the audience dozing off in 3 minute intervals. Does that mean you're being really boring? Or did that person just not get enough
sleep the night before? Feedback can be ambiguous, and in such cases, we are prompted to rely more on our own sense of how well we have preformed, than on direct outside information; a strategy that, if not prone to disaster, is at least prone to causing some
bias in our self-assessment.
In the case of evaluating other's impression of individual performances - so you can read in a research article from the July 2008 edition of the Journal Psychological Science - one source of bias may be that we simply don't separate what is our own private knowledge and what is observable to our audience (something I have written about before
here). You may, for example, possess private information that you used to be much more patient than you are now, that you are more patient than most of your friends, but still less patient than you wish you were. When asked for judgment of how patient you are, current acquaintances, however, who are unaware of your wishes, your friends and your past, should hardly be thought to take any of this private information into account. Nonetheless, it turns out that we, when thinking about how we are being perceived, do in a certain sense assume that this private information is taken into account. A nice analogy from the study states:
" like jurors who find it difficult to disregard inadmissible evidence once it has been provided, people may find it difficult to disregard what they know is private information when intuiting how others view them."
In particular, the study presents a number of experiments in which people get to practice a number of tasks in private, and then perform the previously practiced task before a judging audience. The experimenters then ask their subjects to rate their own performance in practice and in performance, but also to anticipate their audience's rating of the performance. The findings follow the general pattern, that those subjects, who thought they did comparatively better in private practice than in the public performance, anticipated harsher judgment, while those who improved from practice to performance, anticipated more favorable judgment.
A variation of the same experiment, shows that private knowledge about how one's own performance compares to other people's performance on similar tasks, also seems to bias how we anticipate others might judge us.
The study's authors seem to interpret their experimental findings in terms of a bias towards incorrect knowledge attribution; i.e. the authors believe that their subjects are somehow considering their private knowledge as i fit were available to those whose judgment they are anticipating.
While writing up this post however, I began thinking that maybe a simpler explanation exists:
Maybe it is just that people try to formulate an estimate of an unbiased standard against which they will be judged, and update this estimate whenever new information becomes available. Including our own private information in this estimate is rational, if we assume that the people judging us also possess their own set of private information, and that on average everybody's information should converge to the true unbiased standard. This would make game theoretical sense, and would certainly be how an economist would interpret these results...but then again, I am also not loath to the idea, that sometimes knowing more can leave you worse off...
However one wishes to interpret these particular results, there do exist several other studies which confirm, what most of us experience at some stage of our lives; namely that we are often harsher critics of ourselves, than are others. As the 2008 study summarizes, this is often due to
"people's failure to consider information that observers take into account. People account insufficiently for observers' tendency to empathize and commiserate with those who commit embarrassing blunders; they do not consider ‘‘nonfocal'' information as fully as observers do; and they fail to account for observers' tendency to adjust their inferences to reflect mitigating situational constraints"
It seems then, that no matter how we put it, there is some bias to contend with; which reminds me of this older post I wrote on neglecting context and the so called "frog pond effect"...
Main Reference:
Chambers JR, Epley N, Savitsky K, & Windschitl PD. (2008) Knowing too much: using private knowledge to predict how one is viewed by others. Psychological science : a journal of the American Psychological Society / APS, 19(6), 542-8. PMID: 18578843