When Predictions Fail: The Dilemma of Unrealistic Optimism

2002/07/08 by David A. Armor, Shelley E. Taylor · 1 citation
Decision Sciences · Psychology · Social Sciences · #Decision-Making and Behavioral Economics #Behavioral Health and Interventions #Experimental Behavioral Economics Studies #Dilemma #Optimism #Action (physics) #Optimism bias #Variety (cybernetics) #Perception #Psychology #Social psychology #Computer science #Positive economics #Economics #Epistemology #Artificial intelligence

paper · doi:10.1017/cbo9780511808098.021

openalex publication_date 2002/07/08 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30

Abstract

One of the most robust findings in the psychology of prediction is that people's predictions tend to be optimistically biased. By a number of metrics and across a variety of domains, people have been found to assign higher probabilities to their attainment of desirable outcomes than either objective criteria or logical analysis warrants. Yet the very prevalence of optimistic biases presents an intriguing dilemma: Given that many of the decisions people make, most of their choices, and virtually all plans are based on expectations about the future, it would seem imperative that people's predictions and expectations be free from bias. If the majority of predictions, expectations and performance-relevant perceptions are optimistically biased, how can people make appropriate decisions, or choose effective courses of action? We review research on optimistic biases in personal predictions and address the question of how people can maintain these biases when doing so would seem to be maladaptive. We begin by reviewing empirical evidence that has shown optimistic biases to be a common feature of people's predictions and expectations. EVIDENCE OF OPTIMISTIC BIAS IN PERSONAL PREDICTIONS Henrik Ibsen maintained “that man is in the right who is most clearly in league with the future” (in Sprinchorn, 1964). By similar logic, one might argue that the clearest demonstrations of optimistic biases are those that have revealed systematic discrepancies between people's predictions and the outcomes they ultimately attain.

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Cited by

• Positive illusions [wikipedia]