May 2nd, 2015
A great amount of studies demonstrate that smoking cigarettes causes cancer. But although the risk statistics are clear, many people don’t change their unhealthy habit. One of the reasons is their optimistic mind, which generates a belief they are in control of their lives. Bad things – diseases, car accidents, divorces, bankruptcy, death – only happen to others.
This bright outlook on life is called the optimism bias. A mechanism that makes humans pretty much incapable of applying basic risk statistics to their own lives. And this can cause trouble, especially when we become too optimistic.
Studies demonstrate that, for example, chief financial officers “were grossly overconfident about their ability to forecast the market”, Daniel Kahneman writes in his book “Thinking, Fast and Slow”. Researchers at Duke University collected 11,600 CFO forecasts and matched them to market outcomes. They found that the correlation was less than zero, meaning the more confident a CFO was, the less likely it was for his prediction to become reality.
However, humans developed this optimistic way of thinking for a reason. It helps them to better cope with negative emotions. Their rose-colored glasses cause them to view the world just a little better than it actually is. But without them we would never get anything done, says neuroscientist and author of “The Optimism Bias” Tali Sharot: “Optimism pushes us to take chances – attempt a new job, a new relationship. It also acts as a self fulfilling prophecy, as believing a goal is attainable makes it more likely to be.”
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