Optimism Bias

When looking to our future, we tend to inflate the good stuff and downplay the bad...

Optimism Bias

When looking to our future, we tend to inflate the good stuff and downplay the bad...

Our tendency to be too hopeful leads us to consistently overstate the expected success of our investments, the chances of achieving our future dreams, or even our perceived ability to avoid a car accident whilst driving drunk, when compared to our friends.

Sharot (2011), The Optimism Bias. Current Biology.

Over the years, Tali Sharot and her colleagues at University College London have found countless evidence of the Optimism Bias. In one study, where people were asked to imagine experiences both desirable (A lottery win, an awesome date etc) and undesirable (ending a relationship or losing one’s wallet), their mental image of the positive events were more intense and rich than the negative ones.

And as well as spending less time mulling over negative outcomes than we do over positive ones, it’s been shown that optimists save more, are more healthy, take more vitamins and more readily adopt a low-fat diet.

But let’s not get carried away with all this good news, because the truth is that this bias is a little crazy…dangerous even. Sharot and co conducted a study asking people to guess how likely it was that they’d experience certain bad things (such as Alzheimer’s disease) in their lifetime. They were then shown the average chance of actually suffering such events.

When asked afterwards to estimate a second time the chances of these bad events occurring, they found that people who received information more positive than their initial thoughts (i.e. a smaller chance of suffering from a disease than expected), they were more likely to reduce their new estimate to closely match it.

And I’m sure you can guess what the participants did with the more negative information… Those who received information worse than their original estimate tended not to change their estimations much. Essentially, people changed their beliefs selectively in light of only positive information, indicating that we’re biased towards believing only the positive.

This intriguing research suggests that our brains deliberately choose to ignore information that we don’t really want to hear, whilst embracing the good stuff. And while this can be dangerous, it can also be adaptive, helping us avoid mental health issues such as depression. Going further, were it not for the Optimism Bias, it’s suggested that we might otherwise all be mildly depressed! So how does is this bias relate to creating and marketing great products? Let’s find out…

Key takeaways for Decision-Makers

Further Reading

Neural mechanisms mediating optimism bias Article (Sharot et al., 2007)

How unrealistic optimism is maintained in the face of reality PDF (Sharot et al., 2011)

Debiasing through Law PDF (Jolls & Sunstein, 2006)

Nudge: Improving decisions about health, wealth and Happiness Book (Thaler & Sunstein, 2009)

Nudge - The Piss Screen Blog post (Thaler & Sunstein, 2008)

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