Optimism bias

The half a glass of water helps illustrates of two different mental attitudes, optimism (half full) and pessimism (half empty)

In the field of psychology: "Learned optimism involves developing the ability to view the world from a positive point of view. It is often contrasted with learned helplessness." Tali Sharot in the journal Current Biology, wrote about optimism bias:

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The optimism bias is defined as the difference between a person's expectation and the outcome that follows. If expectations are better than reality, the bias is optimistic; if reality is better than expected, the bias is pessimistic. The extent of the optimism bias is thus measured empirically by recording an individual's expectations before an event unfolds and contrasting those with the outcomes that transpire. This methodology reveals, for instance, that 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. Most of us predict deriving greater pleasure from a vacation than we subsequently do, and we anticipate encountering more positive events in an upcoming month (such as receiving a gift or enjoying a movie) than we end up experiencing (Figure 1A). Across many different methods and domains, studies consistently report that a large majority of the population (about 80% according to most estimates) display an optimism bias. Optimistic errors seem to be an integral part of human nature, observed across gender, race, nationality and age.

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Pollyanna principle

See also: Pollyanna principle

Pollyanna principle "refers to an excessively optimistic or naive perspective, often characterized by an unwillingness to acknowledge or address negative realities. It's based on the character Pollyanna Whittier from the 1913 novel, who consistently finds reasons to be cheerful despite difficult circumstances. While optimism is generally considered a positive trait, Pollyanna thinking can be detrimental when it leads to ignoring problems, denying negative emotions, or failing to prepare for potential challenges."

Probabilistic thinking

See also: Probabilistic thinking

Probabilistic thinking is a way of approaching situations and potential problems by considering the likelihood of a different range of outcomes on a continuum rather than assuming a single, certain outcome. It involves acknowledging uncertainty, estimating probabilities, and making sound and wise decisions based on expected value. This approach can lead to more informed decisions and better management of risk in various aspects of life. Probabilistic thinking is useful in identifying the most likely outcomes and the best decisions to make.

Rational thinking employs probabilistic thinking. The opposite of probabilistic thinking is binary/all-or-nothing thinking, having an optimism bias such as having a "lottery mentality" or being a pessimist who engages in negative thinking (See: Cognitive bias).

Quote

“Never underestimate how wrong you can be. Even the most careful planning can be overtaken by external events and circumstances.” - Dan Peña, American businessman and business coach

See also

• Dunning-Kruger effect
• Emotional bias
• Cognitive bias
• Optimism
• Denialism
• Decision making
• Attitude
• Risk management
• Risk

External links

Article:

• Why do we overestimate the probability of success?, Decision Lab
• Understanding the Optimism Bias by By Kendra Cherry, MSEd
• Delusions of Success: How Optimism Undermines Executives’ Decisions, Harvard Business Review

Videos:

• Optimism bias, Video playlist