BiasProbability & risk · Cognitive Bias · Entry 109
Optimism Bias – when you believe things will go well, even if the odds say otherwise
Do you believe bad things happen to others, but not to you? That’s Optimism Bias – the tendency to underestimate negative events and overestimate positive outcomes.
Where it can show up
- Finance & investments – people believe their business will succeed, even when statistics suggest otherwise.
- Health & safety – drivers assume they won’t get into accidents and ignore precautions.
- Personal life – people think they will never divorce, despite high divorce rates.
A practical countermeasure
- Be realistic – hope for the best, but acknowledge risks.
- Trust data, not just gut feelings – if 90% of startups fail, yours isn’t immune.
- Plan for worst-case scenarios – anticipating problems isn’t pessimism, it’s smart thinking.