Optimism- Good or Bad

Ta l i S h a r o t
T h e O p t i m i s m b i a s
OPTIMISM
Good
or
Bad

Ta l i S h a r o t

 A cognitive illusion
 Tendency to overestimate our likelihood of
experiencing good events in our lives and
underestimate our likelihood of experiencing bad
events.
OPTIMISM BIAS
Ta l i S h a ro t

 Marriage
In the Western world, divorce rates are about 40%. But
when you ask newlyweds about their own likelihood of
divorce, they estimate it at 0%
REAL LIFE CASE
Ta l i S h a ro t

 Marriage
So it turns out that optimists are not less likely to
divorce, but they are more likely to remarry.
REAL LIFE CASE
Ta l i S h a ro t
In the words of

REAL LIFE FACTS
Ta l i S h a ro t
75% of British people said that they were optimistic
about the future of their own families.

Q: Asked how well they get along with others.
Believes they're at the,
bottom 25 % -- 10 out of 1,500.
top 25% -- almost all
LIVE EXPERIMENT
Ta l i S h a ro t
Most of the people put themselves above
average on most of these abilities

LIVE EXPERIMENT
Ta l i S h a ro t
All can’t be
better than
everyone else.

GOOD or BAD
Ta l i S h a ro t
Logic:
If we don't expect
greatness, well we're not going
to be disappointed when these
things don't happen.
And we're pleasantly surprised
when they do, we will be
happy.
But the question is, is it good for us?
So some people say No.

GOOD or BAD
Ta l i S h a ro t

GOOD or BAD
Ta l i S h a ro t
Reason 1:
Whatever happens, whether you succeed or you
fail, people with high expectations always feel better.
Because how we feel when we get dumped or win
employee of the month depends on how we interpret
that event.

Reason 1: experiment
Studies on high and low expectations.
People with high expectations succeed, they attribute that
success to their own traits.
"I'm a genius, therefore I got an A, therefore I'll get an A again
and again in the future."
When they failed, it’s because the exam just happened to be
unfair. Next time they will do better.
People with low expectations do the opposite.
When they failed it was because they were dumb
When they succeeded it was because the exam just
happened to be really easy. Next time reality would catch up
with them. So they felt worse.
GOOD or BAD
Ta l i S h a ro t

Reason 2:
Regardless of the outcome, the pure act of anticipation
makes us happy.
GOOD or BAD
Ta l i S h a ro t

Students were asked to imagine getting a passionate kiss
from a celebrity.
Then asked, "How much are you willing to pay to get a
kiss from a celebrity if the kiss was delivered
immediately, in 3 hours, in 24 hours, in 3 days, in 1 year,
in 10 years?
GOOD or BAD
Ta l i S h a ro t

GOOD or BAD
Ta l i S h a ro t
Students were asked to imagine getting a passionate kiss
from a celebrity.
3 days seemed to be the optimum amount.

So…
GOOD or BAD
Ta l i S h a ro t

Reason 3:
also,
GOOD or BAD
Ta l i S h a ro t

It acts as a self-fulfilling prophecy. Controlled
experiments have shown that optimism is not only
related to success, it leads to success.
Optimism leads to success in academia and sports and
politics.
Most surprising benefit of optimism is health. If we
expect the future to be bright, stress and anxiety are
reduced.
GOOD or BAD
Ta l i S h a ro t

Outcomes
Ta l i S h a ro t
So optimists are
people who
expect more
kisses in their
future, more
strolls in the
park.

Outcomes
Ta l i S h a ro t
Without the optimism bias, we would all be slightly
depressed.
People with mild
depression actually are more
realistic than healthy
individuals.
Individuals with severe
depression have a pessimistic
bias. So they tend to expect
the future to be worse than it
ends up being.

So all in all, optimism has lots of benefits. But how do we
maintain optimism in the face of reality?
STUDY
Ta l i S h a ro t

People were asked to estimate their likelihood of
experiencing different terrible events in their lives.
So, for example, what is your likelihood of suffering from
cancer?
And then they were told the average likelihood of
someone like them to suffer these misfortunes.
So cancer, for example, is about 30 percent.
And then we asked them again, "How likely are you to
suffer from cancer?“
Will people take the information given to them
STUDY
Ta l i S h a ro t

• People do take the information given to them to
change their beliefs but mostly when the information
we gave them was better than what they expected.
• If one said 50%, after getting to know the 30, next
time around he will say 35%. So they learned quickly
and efficiently.
• If one said 1%, even after giving the new information
will still think it's about 11%
STUDY
Ta l i S h a ro t

Everyone is aware that likelihood of cancer is 30% and of
divorce is 40%. But they didn't think that those numbers
were related to them.
STUDY
Ta l i S h a ro t
What this means is that warning signs
such as these may only have limited
impact.

What was going on inside the human brain that
prevented us from taking these warning signs personally.
STUDY
Ta l i S h a ro t
But at the same
time, when we hear
that the housing
market is hopeful, we
think, "Oh, my house
is definitely going to
double in price.

To try and figure that out, participants were asked to lie
in a brain imaging scanner. And using a method called
functional MRI, the regions in the brain that were
responding to positive information were identified
STUDY
Ta l i S h a ro t

if someone said, "My likelihood of suffering from cancer
is 50 percent," and we said, "Hey, good news. Average
likelihood is 30 percent," the left inferior frontal gyrus
would respond fiercely.
On the other side of the brain, the right inferior frontal
gyrus was responding to bad news. And here's the thing:
it wasn't doing a very good job. The more optimistic you
were, the less likely this region was to respond to
unexpected negative information.
STUDY
Ta l i S h a ro t

STUDY
Ta l i S h a ro t
The average amount of bias that a normal human has i.e.
how much he learns from good news relative to bad news.

STUDY
Ta l i S h a ro t
After interfering with the region that we
found to integrate negative information
the optimism bias grew even larger. We
made people more biased

STUDY
Ta l i S h a ro t
Then interfered with the brain region that we found to
integrate good news and the optimism bias disappeared.

Amazed by these
results!!!
STUDY
Ta l i S h a ro t
because one is able to eliminate a deep-rooted
bias in humans.

PITFALLS
Ta l i S h a ro t
A firefighter from California says, "Fatality investigations
for firefighters often include 'We didn't think the fire was
going to do that,' even when all of the available
information was there to make safe decisions."

So unrealistic optimism can lead to risky
behavior, to financial collapse, to faulty
planning.
PITFALLS
Ta l i S h a ro t
The British government,
acknowledged …..
They adjusted the 2012
Olympic budget for the
optimism bias.

“So what we would really
like to do, is we would like to
protect ourselves from the
dangers of optimism, but at
the same time remain
hopeful, benefiting from the
many fruits of optimism.” -
Tali Sharot
CONCLUSION
Ta l i S h a ro t

The key here really is KNOWLEDGE
CONCLUSION
Ta l i S h a ro t
It’s a good thing
because one is enabled
to strike a balance, to
come up with plans
and rules to protect
themselves from
unrealistic
optimism, but at the
same time remain
hopeful.

CONCLUSION
Ta l i S h a ro t

CONCLUSION
Ta l i S h a ro t
If you're an optimistic
penguin who believes they can
fly, but then adjusts a parachute
to your back just in case things
don't work out exactly as you
had planned, you will soar like
an eagle, even if you're just a
penguin.

Ta l i S h a ro t
THANK YOU

Ta l i S h a ro t
submited by,
LTL Fela
PGP30086
under the guidance of,
Professor Sameer Mathur
Ph.D. & M.S. (Marketing)
Carnegie Mellon
MBASkills.IN
P E R S O N A L B R A N DI N G
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