The ability to make predictions about the future is one of the keystone achievements of human cognition. It allows us to make better decisions so that we can reduce negative outcomes and increase the chances for positive outcomes.
However, studies have shown that sometimes we tend to have an overestimation of the likelihood of positive events when it comes to our own lives. For example, although people know that the average divorce rates are nearing 50% in the western world, couples who are about to get married estimate their own likelihood of divorce as negligible. This phenomenon is referred to as the Optimism bias.
Cognitive neuroscientist, Tali Sharot says, “We may expect to live longer than objective measures, overestimate our success in the job market, and believe that our children will be especially talented.”
Being too optimistic in this manner could create blind spots to the hidden risks in life and business. However, there are a lot of good things that come with a healthy dose of optimism bias.
People with high expectations for themselves in the future were happier when they achieved those future positive outcomes.
People who are optimistic about a positive future are generally healthier and happier. Depression is simply the absence of any hope about the future.
Read
This guardian article on the topic is a good summary of the book, The Optimism Bias.
Watch
Tali Sharot’s TED talk is the best video out there where she talks about the research that suggests our brains are wired to look on the bright side -- and how that can be both dangerous and beneficial.
Application Suggestions
Life: Don’t turn a blind eye to the risks of future health issues. Practice healthy eating and workout habits. Avoid smoking and excessive consumption of alcohol.
Most people are foolish in thinking that, “Smoking kills, but only the person next to me” Go purchase that life insurance that you have been putting off forever.Work: When you start working on that next project, don’t underestimate the potential risks and create over-optimistic plans. Conduct detailed planning sessions and systematically track risks using a risk register during the course of the project execution.
Business: If you are starting a new business, spend some extra time evaluating the gaps in your business plan. Meet with people outside of your friends and family to get an unbiased evaluation of the business plan.
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