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Optimism bias: Difference between revisions

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Evidence, indicates that most people have ingrained optimism biases and that too much optimism is detrimental to mental health<ref>'''Hope, optimism and delusion'''. Psychiatr Bull (2014). Rebecca McGuire-Snieckus1 2014 Apr; 38(2): 49–51. doi: 10.1192/pb.bp.113.044438. Accessed on 22nd August 2022, via https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4115405/</ref>. Take for instance gambling, it '''is easier for rich people as the amount of money that they tend to risk as a percentage of their overall wealth is minimal. However, poorer people still gamble it's just a lot harder for them.'''
[[File:Optimism bias.jpg|alt=Optimism bias|thumb|'''Figure 1'''. Optimism bias, is proven by looking at predictions versus subsequent reality.]]
'''Optimism bias is a cognitive bias that causes one to believe that they themselves are less likely to experience a negative event relative to others. Scientists has shown this as erroneous logic in multiple human studies''' '''revealing''':


A computer if you asked it to gamble all of its wealth on something that is risky would almost definitely say no. 100% of everything for 200% is not worth the risk of losing everything. This means, with the numbers alone there is an optimism bias built into much of human reasoning. As early humans had to risk their lives every day.
* People are excessively and unrealistically optimistic when judging their driving competency and accident risk.<ref>'''The optimism bias and traffic accident risk perception.''' Accident Analysis & Prevention. Volume 21, Issue 4, August 1989, Pages 333-340. David M.DeJoy. <nowiki>https://doi.org/10.1016/0001-4575(89)90024-9</nowiki>. Accessed on 22 August via <nowiki>https://www.sciencedirect.com/science/article/abs/pii/0001457589900249</nowiki>.</ref>
* People tend to think hazardous events at work are less likely to happen to themselves compared to others doing the same job.<ref>'''It Won't Happen to Me''': An Investigation of Optimism Bias in Occupational Health and Safety. Carlo Caponecchia. First published: 23 March 2010. Accessed on 22 August 2022 via <nowiki>https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1559-1816.2010.00589</nowiki>.</ref>
* Students expect to receive higher starting salaries and more job offers than they end up getting.
* People tend to underestimate how long a project will take to complete and how much it will cost.
* We expect greater pleasure from a vacation than we subsequently do.
* We anticipate greater financial profits<ref>'''Predictive properties of analysts' forecasts of corporate earnings'''. T.G. Calderon. Mid-Atlantic J. Bus., 29 (1993), pp. 41-58. Accessed on 22 August 2022 via: https://www.proquest.com/openview/0505cfde23acf3e4d1bd39326484e684/1?pq-origsite=gscholar&cbl=24292</ref>, relationship outcomes<ref>'''When every relationship is above average''': perceptions and expectations of divorce at the time of marriage. L.A. Baker, R.E. Emery. Law Hum. Behav., 17 (1993), pp. 439-450. '''<u>[[When every relationship is above average: perceptions and expectations of divorce at the time of marriage|Read an AI summary.]]</u>'''</ref>, longevity<ref>'''Optimism and economic choice'''. M. Puri, D.T. Robinson J. Financ. Econ., 86 (2007), pp. 71-99. Accessed on 22 August 2022 via https://www.sciencedirect.com/science/article/abs/pii/S0304405X07001122</ref>, or professional success<ref>'''Delusions of success'''. How optimism undermines executives' decisions. D. Lovallo, D. Kahneman. Harv. Bus. Rev., 81 (2003), pp. 56. Accessed 22 August 2022 via https://www.academia.edu/download/30346920/Delusions_of_success_-_how_optimism_undermines_executives_decisions.pdf</ref>.
* We anticipate encountering more positive events in an upcoming month (such as receiving a gift or enjoying a movie) than we end up experiencing (see '''Figure 1''')<ref name=":0" />.
* [[Sunk Cost Fallacy|Sunk cost fallacy]] is a prolonged extension of the optimism bias<ref>'''The Effect of Optimism Bias on the Decision to Terminate Failing Projects'''. Werner G. Meyer, SKEMA Business School, France. Project Management Journal, Vol. 45, No. 4, 7–20.</ref>.


Death is the ultimate risk for humans. However, we need to do it, however if we thought about it too much we would not do anything. This is why medicine is so expensive in US and has to be socially administered in the majority of civilised countries. The greatest product you can see someone is the fear of death.
These effects have been seen across age, culture, and species and has a significant societal impact on domains ranging from financial markets to physical and mental health<ref>'''How Dopamine Enhances an Optimism Bias in Humans'''. Current Biology, Volume 22, Issue 16, 21 August 2012, Pages 1477-1481. Accessed on 22nd August 2022 via: <nowiki>https://www.sciencedirect.com/science/article/pii/S0960982212006458#bib4</nowiki></ref>. More recent evidence, suggests that most people have ingrained optimism biases and that too much optimism is detrimental to mental health<ref name=":0">'''Hope, optimism and delusion'''. Psychiatr Bull (2014). Rebecca McGuire-Snieckus1 2014 Apr; 38(2): 49–51. doi: 10.1192/pb.bp.113.044438. Accessed on 22nd August 2022, via https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4115405/</ref>.  


Optimism bias has to exists otherwise nothing would be done.
=== ''Why does this cognitive bias exist?'' ===
The evolutionary psychology reasoning infers that humans had to risk their lives every day. If they were acting on pure rationality our line would have starved to death. Death is the ultimate risk for humans. However, we need to do it, however if we thought about it too much we would not do anything. This is why medicine is so expensive in US and has to be socially administered in the majority of civilised countries. The greatest product you can see someone is the fear of death. The optimism bias has to exists otherwise nothing would be done.
 
'''References'''<references />

Latest revision as of 21:34, 30 January 2023

Optimism bias
Figure 1. Optimism bias, is proven by looking at predictions versus subsequent reality.

Optimism bias is a cognitive bias that causes one to believe that they themselves are less likely to experience a negative event relative to others. Scientists has shown this as erroneous logic in multiple human studies revealing:

  • People are excessively and unrealistically optimistic when judging their driving competency and accident risk.[1]
  • People tend to think hazardous events at work are less likely to happen to themselves compared to others doing the same job.[2]
  • Students expect to receive higher starting salaries and more job offers than they end up getting.
  • People tend to underestimate how long a project will take to complete and how much it will cost.
  • We expect greater pleasure from a vacation than we subsequently do.
  • We anticipate greater financial profits[3], relationship outcomes[4], longevity[5], or professional success[6].
  • We anticipate encountering more positive events in an upcoming month (such as receiving a gift or enjoying a movie) than we end up experiencing (see Figure 1)[7].
  • Sunk cost fallacy is a prolonged extension of the optimism bias[8].

These effects have been seen across age, culture, and species and has a significant societal impact on domains ranging from financial markets to physical and mental health[9]. More recent evidence, suggests that most people have ingrained optimism biases and that too much optimism is detrimental to mental health[7].

Why does this cognitive bias exist?

The evolutionary psychology reasoning infers that humans had to risk their lives every day. If they were acting on pure rationality our line would have starved to death. Death is the ultimate risk for humans. However, we need to do it, however if we thought about it too much we would not do anything. This is why medicine is so expensive in US and has to be socially administered in the majority of civilised countries. The greatest product you can see someone is the fear of death. The optimism bias has to exists otherwise nothing would be done.

References

  1. ↑ The optimism bias and traffic accident risk perception. Accident Analysis & Prevention. Volume 21, Issue 4, August 1989, Pages 333-340. David M.DeJoy. https://doi.org/10.1016/0001-4575(89)90024-9. Accessed on 22 August via https://www.sciencedirect.com/science/article/abs/pii/0001457589900249.
  2. ↑ It Won't Happen to Me: An Investigation of Optimism Bias in Occupational Health and Safety. Carlo Caponecchia. First published: 23 March 2010. Accessed on 22 August 2022 via https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1559-1816.2010.00589.
  3. ↑ Predictive properties of analysts' forecasts of corporate earnings. T.G. Calderon. Mid-Atlantic J. Bus., 29 (1993), pp. 41-58. Accessed on 22 August 2022 via: https://www.proquest.com/openview/0505cfde23acf3e4d1bd39326484e684/1?pq-origsite=gscholar&cbl=24292
  4. ↑ When every relationship is above average: perceptions and expectations of divorce at the time of marriage. L.A. Baker, R.E. Emery. Law Hum. Behav., 17 (1993), pp. 439-450. Read an AI summary.
  5. ↑ Optimism and economic choice. M. Puri, D.T. Robinson J. Financ. Econ., 86 (2007), pp. 71-99. Accessed on 22 August 2022 via https://www.sciencedirect.com/science/article/abs/pii/S0304405X07001122
  6. ↑ Delusions of success. How optimism undermines executives' decisions. D. Lovallo, D. Kahneman. Harv. Bus. Rev., 81 (2003), pp. 56. Accessed 22 August 2022 via https://www.academia.edu/download/30346920/Delusions_of_success_-_how_optimism_undermines_executives_decisions.pdf
  7. ↑ 7.0 7.1 Hope, optimism and delusion. Psychiatr Bull (2014). Rebecca McGuire-Snieckus1 2014 Apr; 38(2): 49–51. doi: 10.1192/pb.bp.113.044438. Accessed on 22nd August 2022, via https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4115405/
  8. ↑ The Effect of Optimism Bias on the Decision to Terminate Failing Projects. Werner G. Meyer, SKEMA Business School, France. Project Management Journal, Vol. 45, No. 4, 7–20.
  9. ↑ How Dopamine Enhances an Optimism Bias in Humans. Current Biology, Volume 22, Issue 16, 21 August 2012, Pages 1477-1481. Accessed on 22nd August 2022 via: https://www.sciencedirect.com/science/article/pii/S0960982212006458#bib4
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