Perhaps appropriately for New Years day, here is a superb, short, review by Emily Pronin on the psychological literature on how people see others and themselves.
The Abstract reads:
People see themselves differently from how they see others. They are immersed in their own sensations, emotions, and cognitions at the same time that their experience of others is dominated by what can be observed externally. This basic asymmetry has broad consequences. It leads people to judge themselves and their own behavior differently from how they judge others and those others behavior. Often, those differences produce disagreement and conflict. Understanding the psychological basis of those differences may help mitigate some of their negative effects.
The full paper is avilable HERE (for a fee).