You’re likely to be chastised if you want to put aside some money for a rainy day or request reasonable levels of contingency funding. Many organizations believe that an open discussion on risk factors indicates that you don’t believe in your project as much. You downgrade the probability, reducing the likelihood of appropriate responses. Here are some ways in which optimism bias can put projects in harm’s way:ĭespite facing risks in the past, you’re likely to hope for the better in the future because of optimism bias. Project managers are often blinded by this neurological bias. We tend to engage in risky behavior even at the workplace. Tali Sharot, the author of The Optimism Bias: A Tour of the Irrationally Positive Brain (2011), notes that this bias is widespread. Organizations not creating a risk management plan because they underestimate the likelihood of risksīeing confident about landing a job because you graduated from an elite educational institute Not adding money to an emergency fund because you overestimate your job security Here are some examples of optimism bias that are quite common: Having an overly sunny outlook on our lives can lead to poor decision-making. In other words, we tend to overestimate the likelihood of experiencing positive or pleasant events. Optimism bias is a mistaken belief that our chances of experiencing positive events are higher and chances of experiencing undesirable events are lower compared to what our peers experience. While this isn’t necessarily a bad thing, underestimating the probability of negative events has its side-effects. We consider ourselves to be rational beings, but there are times when we get too optimistic for our own good. Understanding The Optimism Bias PsychologyĪs humans, we tend to overestimate positive events in our life. Read on to learn more about this bittersweet cognitive bias and its impact on our daily lives. It told us that it’s okay not to feel okay sometimes.Īn overly optimistic mindset often makes way for optimism bias. Having a sunny disposition in life is much appreciated but there may be a flip side to it? Pixar’s Inside Out showed how toxic extreme optimism and positivity can be.

Compare Lake Wobegon effect, overconfidence effect.The ‘positive vibes’ trend gained a lot of popularity in recent years. See also depressive realism, hypomanic episode. Weinstein asked students to estimate the relative likelihoods of various events happening to them, compared to the likelihoods of the same events happening to their peers, and his results showed that they rated their chances of experiencing positive events, such as owning your own home, receiving a good job offer before graduation, and living past 80, to be significantly above the average for students of the same sex at the same university, and their chances of experiencing negative events, such as having a heart attack before age 40, being sued by someone, and being the victim of a mugging, to be significantly below average.

It was first reported in 1925 by the US psychologist F(rederick) H(ansen) Lund (1894–1965) and in 1938 by the US psychologist (Albert) Hadley Cantril (1906–69), and it came to prominence in 1980 when it was studied rigorously and named by the US psychologist Neil D(avid) Weinstein (born 1945) in an article in the Journal of Personality and Social Psychology.

A judgemental bias that tends to affect people's subjective estimates of the likelihood of future events in their lives, causing them to overestimate the likelihood of positive or desirable events and to underestimate the likelihood of negative or undesirable events.

Definition of unrealistic optimism