Optimism Bias

When looking to our future, we tend to inflate the good stuff and downplay the bad...

Our tendency to be too hopeful leads us to consistently overstate the expected success of our investments, the chances of achieving our future dreams, or even our perceived ability to avoid a car accident whilst driving drunk, when compared to our friends.

Sharot (2011), The Optimism Bias. Current Biology.

Over the years, Tali Sharot and her colleagues at University College London have found countless evidence of the Optimism Bias. In one study, where people were asked to imagine experiences both desirable (A lottery win, an awesome date etc) and undesirable (ending a relationship or losing one’s wallet), their mental image of the positive events were more intense and rich than the negative ones.

And as well as spending less time mulling over negative outcomes than we do over positive ones, it’s been shown that optimists save more, are more healthy, take more vitamins and more readily adopt a low-fat diet.

But let’s not get carried away with all this good news, because the truth is that this bias is a little crazy…dangerous even. Sharot and co conducted a study asking people to guess how likely it was that they’d experience certain bad things (such as Alzheimer’s disease) in their lifetime. They were then shown the average chance of actually suffering such events.

When asked afterwards to estimate a second time the chances of these bad events occurring, they found that people who received information more positive than their initial thoughts (i.e. a smaller chance of suffering from a disease than expected), they were more likely to reduce their new estimate to closely match it.

And I’m sure you can guess what the participants did with the more negative information… Those who received information worse than their original estimate tended not to change their estimations much. Essentially, people changed their beliefs selectively in light of only positive information, indicating that we’re biased towards believing only the positive.

This intriguing research suggests that our brains deliberately choose to ignore information that we don’t really want to hear, whilst embracing the good stuff. And while this can be dangerous, it can also be adaptive, helping us avoid mental health issues such as depression. Going further, were it not for the Optimism Bias, it’s suggested that we might otherwise all be mildly depressed! So how does is this bias relate to creating and marketing great products? Let’s find out…

Key takeaways for Decision-Makers

  • Use other biases to limit the effects This bias is particularly important for decision-makers creating health or safety products, where the dangers of being overly optimistic can lead to dreadful outcomes. Hospitals, Nuclear power plants and oil refineries good examples. There are two researched ways of reducing the Optimism Bias (Jolls & Sunstein, 2006): Highlight the Availability Heuristic (make past bad events more easily retrievable from one’s memory) and use Loss Aversion (highlight losses that are likely to occur because of these bad events). Incorporating these two concepts into product design or marketing collateral can go a long way towards helping reduce the risks of this bias.
  • Make negative events obvious Bringing negative events to our mind just before we’re likely to engage in an undesirable act can be a good behaviour change technique. Germany’s “piss screens” are an interesting example of this suggestion - no kidding, they’re really called that. The product developers teamed up with Frankfurt’s taxi services to produce a game that would help reduce drink-driving by persuading drunk drivers to take taxis home instead. They decided to place these urinals in bathrooms, and designed them such that each urinal controls the car. The more drunk you are, the slower you drive, and the game ends with a crash, and a prompt to take a taxi home instead. The aim here is to make the negative effects of a certain action clear to the individual, and offer a clear, safer alternative. Even though a “piss screen” example may not be applicable, the intention with which it was designed has clear, powerful takeaways that you should factor in to your design.
  • Project managers take note! It’s important to negate the potentially huge costs of the positivity bias when estimating the expected time to complete a task or project. We humans are notoriously-bad at sticking to these estimates, as we always tend to think it’ll take a lot less time than it actually does. As project manager, remember to factor in a proportional Optimism Bias multiplier into estimations given. Governments have this problem so consistently that there are even detailed documents outlining a 5-step approach of how to factor the bias into the planning of large projects.
  • The effect isn’t totally uniform across everyone Though it’s commonplace across gender, age and culture, rather aptly, the Optimism Bias doesn’t seem to kick in for people suffering with depression. This is worth remembering if you’re designing solutions for such individuals. Interestingly, because of the absence of unrealistic levels of optimism, those with mild depression are actually much more accurate at predicting future events, seeing the world ‘as it is’, rather than perhaps how we’d like it to be.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

  • Aspirational membership schemes and belonging The category size bias provides a credible explanation for why we human beings tend to associate with large groups that are viewed favourably by society. Being part of a large and “desirable” social group can make others believe that we also possess the many qualities of its members. For small businesses, it suggests that forming or being a part of a consortium or large and high quality networking group can dramatically elevate your brand image.
  • Communicating category sizes to nudge effectively Highlighting the differences between the large and small categories is highly likely to enhance the effect of the Category Size Bias. For instance, for software companies, stating that there are 10 features in the premium version versus 4 in the free version will help nudge a decision towards the premium version

How to customize formatting for each rich text

  1. The findings from this braingem can nudge better healthcare choices, encourage consumption of a given product, and lead to more confident consumer decisions.
  2. We mistakenly believe that items in larger categories have a higher probability of being picked than ones in smaller categories, despite all items having an equal chance of being picked.
  3. We’ll spend or gamble more money on items put in larger categories.
  4. We’re more likely to take action from tasks when they’re in a bigger list, over a smaller list.
  5. We once we put something into a group, we perceive it to adopt all the characteristics of that group. This suggests that small companies should foster alliances with similarly-principled, more established companies.

Better understand others (and yourself too)

Nuggets are highly-distilled research papers to help you make better data-driven decisions

Get the tool