Notes on Optimistic Bias

Whereas in Superiority Bias people think that their skills or attributes are better than they really are, optimistic bias is a well-established illusion that one's future is rosier than it really will be.

It's plausible that they are basically different manifestations of the same drive for self-enhancement. For example, since a great majority of students think they are more intelligent than the average student, it is no surprise that a great majority overestimate their eventual grade.

The following quoted statements taken from David A. Armor and Shelley E. Taylor (2002) "When Predictions Fail: The Dilemma of Unrealistic Optimism" in Thomas Gilovich (et al.) (Eds.) Heuristics and Biases: The Psychology of Intuitive Judgement

• "People expect to complete personal projects in less time than it actually takes to complete them" (Buehler, Griffin & Ross (1994)) (basis of Hofstadter's Law)
• "Students expect to receive higher scores on exams, at least when those exams are still some time away, then they actually receive." (Shepperd, Ouellette and Fernandez (1996))
• "Second-year MBA students were found to overestimate the number of job offers they would receive, the magnitude of their starting salary, and how early they would receive their first offer." (Hoch (1985))
• Professional financial analysts "were reasonably able to anticipate periods of growth and decline in corporate earnings, but consistently overestimated earnings realised." (Calderon (1993))
• Vacationers "anticipate greater enjoyment during upcoming trips than they actually expressed during their trips." (Mitchell, Thompson, Peterson and Cronk (1997))
• Newlyweds "almost uniformly expect that their marriages will endure a lifetime" despite the large proportion of marriages that end in divorce. (Baker and Emery (1993))
• Students "consistently reported that they would behave in more socially desirable ways - for example, that they would be more resistant to unwanted social influence, or more likely to donate time to a worthy charity - than did people who have not first been asked to make predictions about their behaviour". (Sherman (1980))
• "Most people expect they have a better-then-average chance of living long, healthy lives; being successfully employed and happily married; and avoiding a variety of unwanted experiences such as being robbed and assaulted, injured in an automobile accident, or experiencing health problems." (Weinstein (1980))
• "Between 85% and 90% of respondents claim that  their future will be better - more pleasant and less painful - than the future of an average peer" (Armor, 2000, unpublished raw data)
• Most smokers believe they are less at risk of developing smoking-related diseases than others who smoke. (Weinstein, 1998, unpublished manuscript)
• "False belief about personal invulnerability to a variety of health threats may lead people to forgo necessary preventative actions." (See "Irrational optimism ruins your health, work and life" on the blog.) However, Armor and Taylor note that it has been difficult to establish that optimistic bias does lead to more risky behaviour.

Armor and Taylor ask, given that such optimistic predictions must come up against unforgiving reality again and again, how are they maintained? They give a variety of possible answers:

• Perceptual biases affect our experience of the actual outcome, so by an Optimistic Reinterpretation effect, we tell ourselves that our predictions came true (Klaaren, Hodges and Wilson(1994)), or we find an excuse for a worse outcome that preserves our self-esteem (e.g. blaming it on other people). Common sense says that the higher your expectations, the more disappointment you can suffer, but this line of research says that the higher your expectations, the happier you'll be with the eventual outcome.
• Memory biases can also affect people's judgments of whether their predictions were inaccurate.
• A prediction can be partially self-fulfilling, because having made the optimistic prediction, people work harder to achieve it. Optimistic biases are strongest once a decision on a course of action has been made, rather than while multiple options are open.
• Optimistic bias thrives on uncertainty: in conditions of near certainty about the future, or readily available evidence, it diminishes

From Marie Helweg-Larsen & James A. Shepperd (2001) "Do Moderators of the Optimistic Bias Affect Personal or Target Risk Estimates? A Review of the Literature" Personality and Social Psychology Review, Vol. 5, No. 1, 74-95 (online at Sage: subscription required)

"[P]eople believe that they are less likely [than average] to be victims of auto accidents (McKenna, 1993), crime (Perloff & Fetzer, 1986), and earthquakes (Burger & Palmer, 1992; but see Helweg-Larsen, 1999), and that they are less likely than others to fall prey to illness (Perloff & Fetzer, 1986), depression (Kuiper, MacDonald, & Derry, 1983) [or] unwanted pregnancies (Burger & Burns, 1988; Whitley & Hem, 1991)"

Optimistic bias seems greater on issues that are more a matter of personal control, which suggests that it is largely due to people overestimating how skilled they are relative to other people.

Still there are biases towards success in situations of pure chance, suggesting an optimisic bias as opposed to an illusiory superiority.

Does optimistic bias explain why people play lotteries? Your expected return on a UK National Lottery ticket is half the stake: 50p of the one pound price goes to prize money, which is then allocated by an almost entirely random process. Some sort of bias seems to be involved in people buying the tickets week after week, paying plenty of money to the Camelot Group in the process. One obvious bias that might be involved is availability: we can clearly imagine how great we think we would feel to suddenly have millions of pounds, and this mental image sways our behaviour much more than numerical probabilities. Another (not necessarily competing) explanation is that we think of ourselves as special - it's other people who are astronomically unlikely to get a jackpot.

It seems that optimism bias is part of a general bias towards thinking positive things - a Pollyanna Principle.

References

Baker & Emery (1993) "When every relationship is above average: Perceptions and expectations of divorce at the time of marriage". Law and Human Behavior, 17 439-450 (online at JSTOR)

"Marriage license applicants and law students were surveyed about their knowledge of divorce statutes, knowledge of the demographics of divorce, and expectations for their own marriage. Both groups had largely incorrect perceptions of the legal terms of the marriage contract as embodied in divorce statutes, but they had relatively accurate, if sometimes optimistic, perceptions of both the likelihood and the effects of divorce in the population at large. These same individuals expressed thoroughly idealistic expectations about both the longevity of their own marriages and the consequences should they personally be divorced. Increasing individuals' knowledge of divorce statutes through a course on family law did not diminish this unrealistic optimism. [...] These findings suggest that the sense of unfairness and surprise that frequently attend divorce may be a result of systematic cognitive biases rather than of a lack of information about divorce."

Buehler, Griffin and Ross (1994) "Exploring the "planning fallacy": Why people underestimate their task completion times." Journal of Personality and Social Psychology, 67, 366-381. (online at APA PsycNET)

Calderon, T. G. (1993) "Predictive properties of analysts' forecasts of corporate earnings." The Mid-Atlantic Journal of Business, 29, 41-58 (online at findarticles.com: subscription required)

Hoch, S. J. (1985) "Counterfactual reasoning and accuracy in predicting personal events." Journal of Experimental Psychology: Learning, Memory and Cognition, 11, 719-731 (online at APA PsychNET)

Klaaren, K. J., S. D. Hodges and T. D. Wilson (1994) "The role of affective expectations in subjective experience and decision making." Social Cognition, 12, 77-101

Mitchell, T. R., L. Thompson, E. Peterson & R. Cronk (1997) "Temporal adjustments in the evaluation of events: The 'rosy view'." Journal of Experimental Social Psychology, 33, 421-448 (online at IngentaConnect: subscription required)

"In a series of three investigations we examined people's anticipation of, actual experiences in, and subsequent recollection of meaningful life events: a trip to Europe, a Thanksgiving vacation, and a 3-week bicycle trip in California. The results of all three studies supported the hypothesis that people's expectations of personal events are more positive than their actual experience during the event itself, and their subsequent recollection of that event is more positive than the actual experience."

Perloff, Linda S. and Barbara K. Fetzer (1986) "Self-other judgments and perceived vulnerability to victimization." Journal of Personality and Social Psychology. Vol 50(3) 502-510. (online at APA PsycNET)

Shepperd, Ouellette and Fernandez (1996) "Abandoning unrealistic optimism: Performance estimates and the temporal proximity of self-relevant feedback." Journal of Personality and Social Psychology, 70, 844-855. (online at APA PsycNET)

Sherman, J. (1980) "On the self-erasing nature of errors of prediction." Journal of Personality and Social Psychology, 39, 211-221 (online at APA PsycNET)

Weinstein, N. (1980) "Unrealistic optimism about future life events." Journal of Personality and Social Psychology, 39, 806-820 (online at APA PsycNET)

Weinstein's experiment used 120 female students at a college, asking them to compare their own likelihood of various life events to that of the average of one of their peers. The students thought themselves more likely than average to have a mentally gifted child, to live past 80, to get a good job offer before graduation and many other positive outcomes. They considered themselves much less likely than their peers to develop alcoholism, attempt suicide, be sterile, divorce after a few years of marriage, and other negative experiences.

Related papers

Michael D. Robinson and Carol D. Ryff (1999) "The Role of Self-Deception in Perceptions of Past, Present, and Future Happiness" Personality and Social Psychology Bulletin, Vol. 25, No. 5, 596-608

Previous research suggests that self-deception is maximized when (a) there is a lack of concrete information, and (b) the motivation to self-deceive is high. In applying this model to past, present, and future judgments about the self, the future is unique because of its uncertainty, whereas the past is unique because of its lesser relevance to current motivations. We therefore predict that people will be the most self-deceptive when thinking about their future, a prediction supported in four studies (Ns = 96, 125, 40, and 298) using various measures of self-deception and subjective well-being. Studies 1 and 2 provide basic evidence for future self-enhancement, whereas Studies 3 and 4 demonstrate that concrete information about the future reduces this bias. More generally, the findings highlight the special status of future well-being judgments as well as the flexible link between self-deception and self-evaluation.