The above-average effect, also known as the better-than-average effect, refers to the human tendency to view themselves as superior to those around them. It is really quite normal for an individual to regard themselves as being somewhat smarter than others, a better driver, a better housekeeper, kinder, more generous, etc. than other people around them.
To an extent this can be a normal and healthy conceit but it can also be pathological when carried to extremes and used as an excuse to harshly judge or take advantage of others. At extreme levels this can be considered narcissism or narcissistic personality disorder. (hyperlink?) One of the symptoms of psychopathy is the belief that they are considerably smarter than anyone around them.