VALENCE EFFECT - WISHFUL THINKING

Agony!
Beyond power of speech,
When the one thing you want
Is the only thing out of your reach.

Agony!
Oh, the torture they teach!

What's as intriguing-

Or half so fatiguing-

As what's out of reach?

"In the first place, plainly, we are not always conscious of expecting pleasure, when we desire a thing. We may only be conscious of the thing which we desire, and may be impelled to make for it at once, without any calculation as to whether it will bring us pleasure or pain. In the second place, even when we do expect pleasure, it can certainly be very rarely pleasure only which we desire."

John Stuart Mill.

People typically exhibit 'unrealistic optimism' (UO): they believe they have a lower chance of experiencing negative events and a higher chance of experiencing positive events than does the average person. UO has been found to be greater for negative than positive events. This 'valence effect' has been explained in terms of motivational processes.

We are generally more optimistic than pessimistic and tend to over-estimate the probability of good things happening as compared to the chance of bad things happening. The valence of anything is the emotional charge that we feel when we think about it. This can be positive or negative emotion, which indicates positive valence or negative valence. It is natural for us to want good things and so we think more about them. The reverse is generally true when we think less of bad things. The availability that this creates when we are assigning probability tends to make good things seem more likely. Of course if people are pessimistic, then they may think bad things more likely. However, most of us, most of the time, find optimism a more effective state as it can create a self-fulfilling prophecy through the motivational effects it causes. It also likely has evolutionary benefits. Because of the bias towards optimism, being slightly pessimistic is likely to make you more realistic. People whose future is inescapable, such as those with a terminal illness can be more realistic in this way. FMRi tests have shown that optimism is related to reduced coding of undesirable information about the future in the frontal cortex that has been is sensitive to negative estimation errors. The 'Pollyanna' effect is where a person sees good in all things and is overly optimistic. Whilst some optimism can be helpful, being unremittingly positive is probably not the best survival strategy. The valence effect is sometimes also called 'wishful thinking' or 'optimism bias'.

Rosenhan and Messnick offered subjects a pack of cards that had an equal number of smiling faces and frowning faces. When asked to predict the likelihood of picking particular cards, the subjects over-estimated the chance of picking a smiling face.

Valence effect

The valence effect of prediction is the tendency for people to simply overestimate the likelihood of good things happening rather than bad things. Valence refers to the positive or negative emotional charge some entity possesses.

This finding has been corroborated by dozens of studies. In one straightforward experiment, all other things being equal, participants assigned a higher probability to picking a card that had a smiling face on its reverse side than one which had a frowning face.

In addition, some have reported a valence effect in attribution when we overpredict the likelihood of positive events happening to ourselves relative to others. (See self-serving bias.)

The outcome of valence effects may be called wishful thinking. However, in certain situations, the valence effect may actually alter the event in some way so that it indeed results in a positive outcome. For example, in some cases generals have roused up their soldiers to a point where they were able to emerge victorious in battle.

Wishful thinking

Wishful thinking is the formation of beliefs and making decisions according to what might be pleasing to imagine instead of by appealing to evidence, rationality, or reality. It is a product of resolving conflicts between belief and desire. Studies have consistently shown that holding all else equal, subjects will predict positive outcomes to be more likely than negative outcomes (see valence effect). However, new research suggests that under certain circumstances, such as when threat increases, a reverse phenomenon occurs.

Some psychologists believe that positive thinking is able to positively influence behavior and so bring about better results. This is called "Pygmalion effect".

Christopher Booker described wishful thinking in terms of

“the fantasy cycle” ... a pattern that recurs in personal lives, in politics, in history – and in storytelling. When we embark on a course of action which is unconsciously driven by wishful thinking, all may seem to go well for a time, in what may be called the “dream stage”. But because this make-believe can never be reconciled with reality, it leads to a “frustration stage” as things start to go wrong, prompting a more determined effort to keep the fantasy in being. As reality presses in, it leads to a “nightmare stage” as everything goes wrong, culminating in an “explosion into reality”, when the fantasy finally falls apart.

As a fallacy

In addition to being a cognitive bias and a poor way of making decisions, wishful thinking is commonly held to be a specific informal fallacy in an argument when it is assumed that because we wish something to be true or false, it is actually true or false. This fallacy has the form "I wish that P is true/false, therefore P is true/false." Wishful thinking, if this were true, would rely upon appeals to emotion, and would also be a red herring.

Wishful thinking may cause blindness to unintended consequences.

Optimism[edit]

Wishful seeing is also linked to optimism bias through which individuals tend to expect positive outcomes from events despite such expectations having little basis in reality. In order to determine the neural correlates underlying optimism bias, one functional magnetic resonance imaging (fMRI) study imaged the brains of individuals as they recalled autobiographical moments related to life events and then rated their memories on several scales. These ratings revealed that participants viewed future positive events as more positive than past positive events and negative events as more temporally distant. The active brain regions, compared to a fixation point, were the rostral anterior cingulate cortex (rACC) and the right amygdala. Both of these areas became less active when imagining negative future events. The rACC is implicated in assessing emotional content and has strong connections to the amygdala. It is suggested that the rACC regulates activation in brain regions associated with emotion and autobiographical memory, thus allowing for the projection of positivity onto images of future events.

It is important to consider physical aspects such as eye movement and brain activity and their relationship to wishful thinking, wishful seeing, and optimism. Isaacowitz (2006) investigated the motivational role of gaze, which he claims is highly correlated to an individual’s interests and personality. In his study, participants who embodied varying levels of self-reported optimism were directed to look at images of skin cancer, line drawings that were similar to the cancer pictures, and neutral faces. Using a remote eye tracking system that measured the movement of the participants gaze, Isaacowitz found that more optimistically minded young adults gazed less on the skin cancer images when compared to the less optimistically minded participants. This data was replicated in a follow up study in which participants were screened for their genetically based risk for contracting skin cancer (even though some participants were more at risk than others, higher levels of optimism were correlated with a less fixated gaze on the skin cancer images despite the fact that the images were relevant to some participants).

The "Fortune teller error", or predicting the future - Everyone imagines events in the future; people go wrong when they accept uncertain events as inevitable. Many aspects of the future are highly uncertain. Overly optimistic people can jump to the conclusions that a task is going to succeed. Seeing positive events as inevitable can lead to disappointment, frustration, or a failure to cover all possible bases or creating backup plans for scenarios in which things go wrong.

But the problem with the optimism gene is it gives a false sense of confidence. We believe that if we keep doing what we are doing, that things will get better. And what we know, and often preach, is that we have to do something different to get different results.

The optimism bias (also known as unrealistic or comparative optimism) is a cognitive bias that causes a person to believe that they are less at risk of experiencing a negative event compared to others. There are four factors that cause a person to be optimistically biased: their desired end state, their cognitive mechanisms, the information they have about themselves versus others, and overall mood.

The factors leading to the optimistic bias can be categorized into four different groups: desired end states of comparative judgment, cognitive mechanisms, information about the self versus a target, and underlying affect. These are explained more in detail below.

Self-enhancement

Self-enhancement suggests that optimistic predictions are satisfying and that it feels good to think that positive events will happen. People can control their anxiety and other negative emotions if they believe they are better off than others. People tend to focus on finding information that supports what they want to see happen, rather than what will happen to them. With regards to the optimistic bias, individuals will perceive events more favorably, because that is what they would like the outcome to be. This also suggests that people might lower their risks compared to others to make themselves look better than average: they are less at risk than others and therefore better.

Unrealistic optimism is a pervasive human trait that influences domains ranging from personal relationships to politics and finance. How people maintain unrealistic optimism, despite frequently encountering information that challenges those biased beliefs, is unknown. We examined this question and found a marked asymmetry in belief updating. Participants updated their beliefs more in response to information that was better than expected than to information that was worse. This selectivity was mediated by a relative failure to code for errors that should reduce optimism. Distinct regions of the prefrontal cortex tracked estimation errors when those called for positive update, both in individuals who scored high and low on trait optimism. However, highly optimistic individuals exhibited reduced tracking of estimation errors that called for negative update in right inferior prefrontal gyrus. These findings indicate that optimism is tied to a selective update failure and diminished neural coding of undesirable information regarding the future.

According to popular belief, people tend to think they are invulnerable. They expect others to be victims of misfortune, not themselves. Such ideas imply not merely a hopeful outlook on life, but an error in judgment that can be labeled unrealistic optimism. It is usually impossible to demonstrate that an individual's optimistic expectations about the future are unrealistic. An individual might be quite correct in asserting that his or her chances of experiencing a negative event are less than average. On a group basis, however, it is relatively easy to test for an optimistic bias. If all people claim their changes of experiencing a negative event are less than average, they are clearly making a systematic error, thus demonstrating unrealistic optimism.

3. The greater the perceived probability of an event, the stronger the tendency for people to believe that their own chances are greater than average. Another factor that should influence people's beliefs about their chances of experiencing an event is past personal experience (Lichtenstein, Slovic, Fischhoff, Layman, & Combs, 1978; Hoffman & Brewer, Note 3). Personal experience should make it easier to recall past occurrences of the event and to imagine situations in which the event could occur, leading to greater perceived probability through the mechanism of "availability" (Tversky & Kahneman, 1973, 1974). Furthermore, for many events causal sequences can be constructed which imply that past experience increases the probability of future experience. Someone who has had a heart attack or has close relatives with heart disease is more likely to have a heart attack in the future than someone who has had no contact with heart ailments. Consequently, we predict: 4. Previous personal experience with an event increases the likelihood that people will believe their own chances are greater than average. Hypotheses 3 and 4 concern two event characteristics that may lead people to make 808 NEIL D. WEINSTEIN systematic errors when comparing their own chances with those of other people, but they do not explain the phenomenon of unrealistic optimism. The direction of the errors produced by these characteristics depends on the probability of the event and the frequency of personal experience, not on the type of event. To explain why people would say that their chances are greater than average for positive events but less than average for negative events by using these hypotheses would require that positive events always be associated with high probability or high personal experience and that negative events always be associated with low probability or low personal experience. There is a way, however, in which egocentric tendencies can produce an optimistic bias for both positive and negative events. If an event is perceived to be controllable, it signifies that people believe there are steps one can take to increase the likelihood of a desirable outcome. Because they can more easily bring to mind their own actions than the actions of others, people are likely to conclude that desired outcomes are more likely to happen to them than to other people. Even for events that are far in the future and have not yet been associated with any overt behavior, people may still be aware of their intentions to act in ways that will help them achieve the desired outcomes. The preceding argument assumes that people generally bring to mind actions that facilitate rather than impede goal achievement. They might do this because facilitating actions really are more plentiful, because they find reassurance in selectively recalling facilitating actions or in exaggerating their importance (a motivational explanation), or because actions taken to produce desired outcomes are, for various reasons, actually easier to remember (a cognitive viewpoint).

Since the process just outlined would not apply to uncontrollable events, we are led to the prediction:

The greater the perceived controllability of a positive event, the greater the tendency for people to believe that their own chances are greater than average. 

The role of dispositional optimism, confidence about experiencing favorable future outcomes, in processing and using health-threatening information in making attitudinal judgments about health-promotion behavior is underexplored. The valenceenhancement hypothesis posits that optimism enhances attitude change following both self-relevant positive and negative messages. 

Unrealistic absolute optimism 

Unrealistic absolute optimism refers to the erroneous belief that personal negative outcomes, assessed on some form of absolute likelihood scale, are less likely to occur than is objectively warranted. Finding an objective standard to use in determining the accuracy of risk beliefs is the biggest challenge in this approach. Many outcomes (such as having a heart attack or dying from lung cancer) may not occur until the distant future and cannot be assessed within a reasonable time frame. 

At the individual level, unrealistic absolute optimism occurs when a person’s estimate of his or her personal risk is too low relative to some individuallevel standard. The individual-level standard might be personal outcomes that actually occur at a later date or personal risk as calculated from an empirically validated risk algorithm. Objective outcomes, such as whether a person does have a heart attack, represent more reliable standards than the predictions of risk algorithms and other actuarial models, which are based on group data and by definition contain uncertainty. If risk algorithms were perfect predictors, they would yield a dichotomous prediction: the event will happen or it will not. Nevertheless, we can assert that a person is displaying unrealistic absolute optimism if his or her prediction is lower than the prediction made by the best available risk algorithm.

If you are unrealistically optimistic about it, you are just setting yourself up for disappointment in the end. Therefore, the end result of being unrealistically optimistic...

If you are unrealistically positive, you will end up crashing and burning in the end, and being horrifically disappointed which will bruise your ego and can make you pessimistic about anything else down the road.

It is very important to be optimistic with caution. You have to also remember, with careful planning and fully embracing reality, things do eventually work out- just not always the way you may expect.

Obviously, positive thinking does have its undisputable benefits, but is there such a thing as being too optimistic? We've all come across that "annoyingly" happy Pollyanna who is sooooo perpetually joyful that their peals of laughter feel like nails on a chalkboard…but really, what's wrong with that? What's wrong with finding joy in a flat tire (you get to practice your tire-changing skills), humor in a broken leg (it really was a pretty funny tumble down those stairs) or new beginnings in a stolen wallet (all those newly shiny cards you will get)? One potential problem is that people who refuse to take off their rose-colored glasses can put both their emotional and physical health at risk. Some optimists - or, more to the point, unrealistic optimists - have been known to ignore serious disease symptoms (assuming that they would simply go away) (Lazarus, 2000), refrain from using safety precautions when taking risks (Myers, 1992), and deal with emotional problems through denial, nonchalance, or blaming others (Centre for Confidence and Well-Being, n.d.; Lawson, 2004). Some stress (non-chronic) is actually good for our body, giving us the boost we need to effectively deal with a situation (Raeburn, 2006). However, research has also revealed that while optimism can be a protective factor against stress, it can actually suppress the immune system in cases where the stressor is much more serious and complex (Segerstrom, 2006). Although very few therapists (if any) would promote negative thinking, setting our expectations lower can, in some cases, result in less disappointment - or at least much less than what an optimist would have expected (Richler, 2000). 

In the late 1970s Neil Weinstein asked 258 students to compare their chances of experiencing several events— some desirable (e.g., live past 80, own home) and some undesirable (e.g., heart attack before age 40, lung cancer)—with that of the average person. If participants were accurate in their assessments, they should, on average, have rated themselves as just as likely to experience the event as the average person. They did not. On average, participants estimated that they were more likely than the average student to experience the desirable events and less likely than the average student to experience the undesirable events (Weinstein, 1980). Weinstein s results were (and are) exciting because they made two very important points about human judgment. The first was that people seem to be unrealistically optimistic about the future. The second was that people seem to possess a remarkable capacity to believe what they want to believe.

http://www.ted.com/talks/tali_sharot_the_optimism_bias/transcript?language=en

https://books.google.es/books?id=ylD6VPdcI68C&pg=PA5&dq=unrealistic+optimism+disappointment&hl=es&sa=X&ei=FCxCVa2UHYfSU-C9gbAD&ved=0CCkQ6AEwAQ#v=onepage&q=unrealistic%20optimism%20disappointment&f=false

Unrealistic optimism is a form of defensive attribution wherein people think that good things are more likely to happen to them than to their peers.

Jumping to conclusions (officially the jumping to conclusions bias, often abbreviated as JTC, and also referred to as the inference-observation confusion) is a psychological term referring to a communication obstacle where one "judge[s] or decide[s] something without having all the facts; to reach unwarranted conclusions". In other words, "when I fail to distinguish between what I observed first hand from what I have only inferred or assumed". Because it involves making decisions without having enough information to be sure you are right, this can result in badly made or rash decisions. This action can be associated with skills such as impulsiveness, leadership, and 'showing initiative', which as opposed to JTC, can have positive connotations.

A specific type of jumping to conclusions is:

Fortune telling – Where one has inflexible expectations for how things will turn out before they happen. A person may predict the outcome of something will be negative before they have any evidence to suggest that may be the case. Examples include "there's no point starting a diet because I'll just break it" and "I'll just have one more cupcake".

                “Fortune telling occurs when a person tries to predict what is going to happen in the future without having the evidence to back these beliefs. "

Optimism as problematic

            This prescription, although understandable, is not unequivocally supported by all data. Indeed, as often happens, by the time knowledge becomes conventional, it is often wrong as well (Katz, 2003). Although the benefits of optimism are well-documented, it often times leads to unrealistic and irrational assessments and behavior which has led some researchers and practitioners to qualify their support for being positive, confident, and optimistic and to focus on demonstrating the dangers of optimism. Sometimes optimism can represent a form of self-deception in which individuals convince themselves that things are different from what available information would suggest (Greenwald, 1997; Mele, 1997; Paulhus & John, 1998). For example, in his studies on optimism, Weinstein (1980, 1984; Weinstein & Klein, 1996) has provided evidence of the harmful effects of optimistic biases in risk perception related to a host of health hazards. Weinstein indicated that overly optimistic views can cause high levels of reality distortion and can lead people to engage in risky behavior (e.g., not wearing seat belts, condoms). Similarly, there is evidence that judgments based on inflated views of self can lead to self-defeating processes. Feather (1961, 1962), for instance, showed that optimistically high expectations for success can cause people to persist fruitlessly at unsolvable tasks.  

            In related research, Kunda (Klein & Kunda, 1992; Kunda, 1990) has provided several examples of defensively motivated reasoning that helps maintain a positive self-view, but is likely to have harmful long-term consequences. Cigarette smokers, for instance, frequently avoid thinking about or trying to quit smoking by adopting self-serving biases that discount their personal susceptibility to the risks of smoking or by boosting their self-view through a variety of personal affirmations (Gibbons, Eggleston, & Benthin, 1997; Steele, 1988). In a similar vein, Robins and John (1997; John & Robins, 1994) have found that optimistic illusions of performance are more likely to be associated with narcissism than mental health. Hubris that incorporates exaggerated pride, arrogance, and self-confidence resulting from such self-absorption is especially pernicious (Hayward & Hambrick, 1997; Kets de Vries, 1990). Individuals possessed with hubris have an overbearing confidence in their abilities to make events conform to their will in spite of contrary external evidence. They believe that whatever external problems might arise will be easily and willfully overcome (Kets de Vries, 1990). Kroll, Toombs, and Wright (2000) noted how hubris has been associated with leadership failure and specifically review Napoleon’s Russian fiasco of 1812, in which he lost his army and empire.

            Webber (2008) likewise noted that military history is rife with examples of leaders who overestimated their likelihood of success, with disastrous results. For instance, Hitler attacked Russia, ignoring his generals’ cautionary advice, and Robert E. Lee came to believe in his troops’ invincibility and chose to storm well-positioned Union forces at Gettysburg against the advice of General James Longstreet. The fruitless attempt by the Allies to dislodge the Turks from the Gallipoli Peninsula in World War I was the product of so much misguided Allied thinking that one wonders how it could possibly have been initiated. And in the Iraq misadventure, some decision-makers ignored postwar planning out of an optimistic belief that Iraqis would welcome American forces—even though it is difficult to come up with an example of an occupying army ever being well-received.

            An overly optimistic view leads to overconfidence in decision making and is known to negatively affect task satisfaction (McGraw, Mellers, & Ritov, 2004) and performance (Sieck & Arkes, 2005). One type of decision making error is groupthink which is the tendency for members of highly cohesive groups to minimize conflict and reach consensus without critically testing, analyzing, or evaluating ideas (Janis, 1982). The problem is that members of such groups may exhibit illusions of invulnerability creating a sense of invincibility and excessive optimism that encourages extreme risk taking that may lead to tragedies (e.g., Bay of Pigs failure, Challenger disaster, U.S. invasion of North Korea).

            Optimism in the form of wishful thinking can also distract people from making concrete plans about how to attain goals (Oettingen, 1996). Unrelenting optimism precludes the caution, sobriety, and conservation of resources that accompany sadness as a normal and presumably adaptive response to disappointment and setback (Nesse & Williams, 1996). In addition, overconfident individuals may unnecessarily risk resources based on inflated expectations of future performance (e.g., Campbell, Goodie, & Foster, 2004). Moreover, initial overconfidence can lead to feelings of failure when the person does not perform as he or she expected leading to diminished future effort and self-efficacy (Bandura & Schunk, 1981; Stone, 1994).

            Senior executives tend, for instance, to stress the importance of stretch goals for their business units. This can have the salutary effect of increasing motivation, but it can also lead unit managers to further skew their forecasts toward unrealistically auspicious outcomes (Lovallo & Kahneman, 2003) which often lead to further problems. Warren Buffet, one of the world’s most successful investors, cautioned against such “cock-eyed optimism” (2001, p. 5) and warned that lofty predictions not only spread unwarranted optimism but also corrode CEO behavior:

            “... I have observed many instances in which CEOs engaged in uneconomic

            operating maneuvers so that they could meet earnings targets they had

            announced. Worse still, after exhausting all that operating acrobatics would

            do, they sometimes played a wide variety of accounting games to ‘make the

            numbers.’ These accounting shenanigans have a way of snowballing: Once a

            company moves earnings from one period to another, operating shortfalls that

            occur thereafter require it to engage in further accounting maneuvers that must

            be even more ‘heroic.’ These can turn fudging into fraud” (Buffet, 2001, p. 6).
            Similarly, when gloomy opinions are suppressed, while optimistic views are rewarded, an organization’s ability to think critically is undermined. The optimistic biases of individual employees become mutually reinforcing, and unrealistic views of the future are validated by the group (Lovallo & Kahneman, 2003). In its grip, managers make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities (Lovallo & Kahneman, 2003). They overestimate benefits and underestimate costs. They spin scenarios of achievement while overlooking the potential for mistakes and miscalculations.

            This excessive confidence is particularly true of organizations that have experienced success. But success often breeds failure, especially in organizations with strong cultures (Miller, 1994). This is because organizations that have tremendous successes begin to believe in their own invulnerability. They often become arrogant and lose their competitive edge. As Leslie Wexner, CEO, of The Limited, Inc. indicated: “Success doesn’t beget success. Success begets failure because the more that you know a thing works, the less likely you are to think that it won’t work. When you’ve had a long string of victories, it’s harder to foresee your own vulnerabilities” (Davis, l994, p. 161). In short, success breeds a sense of self-efficacy, which then causes a perpetuation of the status quo. Although growing self-efficacy can undergird valuable persistence and necessary commitment, its darker side becomes apparent in reactions of hidebound inertia and unwarranted escalation to a course of action (Whyte, Saks, & Hook, 1997).

            Optimistically biased predictions are costly in terms of money, jobs, prestige, or even lives (Sanna, Parks, Chang, & Carter, 2005). Large-scale planning debacles abound, supplying poignant public illustrations of overly optimistic plans gone awry (Flyvberg, Holme, & Soren, 2002; Hall, 1980; Schnaars, 1989). So frequent is this phenomenon that it has been given a name—the planning fallacy, an error in underestimating the time it will take to finish tasks (Buehler, Griffin, & Ross, 1994). For example, the Sydney Opera House, begun in 1957, was originally estimated to be completed in 1963, but a scaled-down version actually opened in 1973—a decade later. The Eurofighter aircraft, conceived jointly by Britain, Germany, Italy, and Spain, was originally planned to be operational in 1997, but the first aircraft were not delivered until 2003 and Boston’s Central Artery/Tunnel project was originally estimated to be finished in 1999, but was not fully completed until 2007.

            Excessive optimism has also been implicated for the well documented phenomenon called the “winner’s curse” (Hendricks, Porter, & Tan, 2008), a phenomenon akin to a Pyrrhic victory in which individuals bid above an item’s (e.g., an acquisition or merger) true value and thus are “cursed” by acquiring it (Lovallo, Viguerie, Uhlaner, & Horn, 2007). By exaggerating the likely benefits of a project and ignoring the potential pitfalls, executives lead their organizations into initiatives that are doomed to fall well short of expectations.

Consider unrealistic optimism as described by Weinstein (1989) with respect to people’s perception of personal risk for illnesses and mishaps. When people are asked to provide a percentage estimate of the likelihood, in comparison with peers, that they will someday experience an illness or injury, most underestimate their risks. The average individual sees himself or herself as below average in risk for a variety of maladies, which of course cannot be. This phenomenon is appropriately lamented because it may lead people to neglect the basics of health promotion and maintenance. More generally, optimism in the form of wishful thinking can distract people from making concrete plans about how to attain goals (Oettingen, 1996). Unrelenting optimism precludes the caution, sobriety, and conservation of resources that accompany sadness as a normal and presumably adaptive response to disappointment and setback (Nesse & Williams, 1996). In organizational contexts Lovallo and his associates (Lovallo & Kahneman, 2003; Lovallo, & Sibony, 2006; Lovallo, Viguerie, Uhlaner, & Horn, 2007) and Webber (2008) have noted how often optimism undermines executives’ decisions because reality is ignored.

In ‘overoptimism’ or the optimistic bias, people believe that they are less likely to experience future negative outcomes, such as contracting a serious disease, than it is objectively warranted.

By and large, the literature accepts that unrealistic optimism is a real phenomenon. A plausible story about its neurobiology is becoming available, thanks to the new studies about the role of dopamine and vestibular stimulation in enhancing or inhibiting unrealistic optimism. However, the claim that optimistic thinking leads to increased wellbeing, better functioning or enhanced health is often challenged. In conditions of uncertainty and risk, some instances of optimism lead people to make better decisions by helping avoid more costly mistakes and contribute to survival and flourishing, bringing both cognitive and evolutionary advantages. For instance, a study found that people with narcissism outperform controls in making decisions when they need to forego an immediate reward for a future benefit, ignoring misleading information. Overconfidence provides status benefits even when one's actual ability is revealed to others: people are not socially sanctioned for their overconfidence.

However, optimism has drawbacks as well, and these are being increasingly examined in the psychological literature. Here are two examples, the first concerning health and the second concerning success in romantic relationships. Unrealistic optimism about health prospects can have immediate psychological benefits, as people are less worried about their future if they think that they are unlikely to suffer from a disease. But there are also significantly bad consequences when people underestimate the risk of suffering from a certain condition and fail to adopt preventive measures that would improve their health prospects. For instance, the belief that one is at low risk of negative outcomes leads to bad decisions that may have serious implications, such as the decision to continue smoking due to the belief that one is unlikely to suffer from lung cancer or the decision not to use contraception due to the belief that one is unlikely to contract sexually transmitted diseases. Although a positive outlook generally supports the wellbeing of people affected by serious conditions and predicts more successful therapeutic interventions, realistic attitudes to chronic degenerative conditions seem to be more beneficial than optimistic ones.

Traditionally, optimism has been regarded as beneficial in ensuring the success of romantic relationships, because the optimistic biases that apply to the self are often extended to romantic partners who are thought to be more attractive, intelligent and talented than they actually are (this effect is sometimes called the love-is-blind bias). And when people have a rosy view of how attractive and talented their partners are, they are more likely to enjoy a satisfying and lasting relationship. However, positive illusions have also been found to generate negative relational outcomes. For instance, the love-is-blind bias seems to be correlated with anxious jealousy, that is, the tendency to imagine a partner's infidelity and ruminate about it, experiencing negative feelings as a result. And although a general disposition towards optimism leads to the adoption of more constructive approaches when difficulties in the relationship emerge, having excessively optimistic expectations about a relationship can lead to disappointment and emotional distress in situations of conflict.

DISCONNECTS BETWEEN EXPECTATIONS AND EXPERIENCE

I would argue further that the reason many of my forewarned patients report to me the experience wasn't as bad as they expected was precisely because I warned them it would be bad. Though I've used a medical example here, the impact of any disconnect between our expectations and our experience is felt in almost all contexts. Our expectations of our experiences dramatically color not just how we experience waiting for them but the experiences themselves. Four scenarios exist regarding expectations and experiences. We can have:

1. Low expectations and a poor experience, where our low expectations can mute the disappointment or even the discomfort we feel at actually having a poor experience.
2. Low expectations but a good experience, leading to a pleasant surprise.
3. High expectations and good experience, in which we get to enjoy not only the anticipation of looking forward to something fabulous but an experience that actually lives up to our expectations and therefore feels thoroughly satisfying.
4. High expectations but a poor experience, in which we often emerge bitterly disappointed or even traumatized.

THE BEST STRATEGY

The "gain" at which we set our expectations tends to be more a matter of habit and disposition than conscious intention for most of us. Some of us expect little, perhaps as a way to defend against disappointment, accepting the cost of a muted or absent anticipatory sense of joy. Others of us can't help having high expectations, basking consistently in the glow of anticipation but often paying a different price: the painful disappointment that comes when experiences fail to live up to those high expectations. Even worse, sometimes having unrealistically high expectations prevent us from being able to enjoy our experiences at all.

There’s a dark side to optimism. Do we believe that the philosophy of “pulling one’s self up by their own bootstraps” is not an overly optimistic one? Have you tried to literally pull yourself up by the straps on your boots? It’s going to take more than optimism to pull that one off. And while the sentiment is metaphorical in nature, it betrays a fundamental flaw with an overly optimistic worldview: unrealistic expectations.

The biggest downside to optimism is that it sets one up for disappointment. Seattle Seahawk fans and New England Patriots haters alike are going to have terrible mornings because they are disappointed. As already mentioned, they were optimistic about the outcome of the football game, and that optimism generated within such people a set of expectations. But the failure of life to meet those expectations created, then, feelings of disappointment and even disillusionment.

Disillusionment. The kind of negative anti-feelings that lead one to write essays like this one. The only type of person who can write an article like that is someone who at one point felt an unrealistic optimism about what life was supposed to provide for them. There were certain expectations about life that weren’t met. And now, through feelings of disappointment, that person wants to pretend to have any kind of understanding about what might go through the mind of a God–if a God (or Gods) would even have anything that resembles a “mind” in the way we mere mortals experience it. That in itself is a bit optimistic–believing that if any Gods exist, that we’d have even the slightest inkling of what they are thinking, if they even think–and it’s the kind of optimism that creates unrealistic expectations that are bound to disappoint the author, yet again.

Rose-Colored Glasses

Most people are highly optimistic most of the time. Research into human cognition has traced this overoptimism to many sources. One of the most powerful is the tendency of individuals to exaggerate their own talents—to believe they are above average in their endowment of positive traits and abilities. Consider a survey of 1 million students conducted by the College Board in the 1970s. When asked to rate themselves in comparison to their peers, 70% of the students said they were above average in leadership ability, while only 2% rated themselves below average. For athletic prowess, 60% saw themselves above the median, 6% below. When assessing their ability to get along with others, 60% of the students judged themselves to be in the top decile, and fully 25% considered themselves to be in the top 1%.

The inclination to exaggerate our talents is amplified by our tendency to misperceive the causes of certain events. The typical pattern of such attribution errors, as psychologists call them, is for people to take credit for positive outcomes and to attribute negative outcomes to external factors, no matter what their true cause. One study of letters to shareholders in annual reports, for example, found that executives tend to attribute favorable outcomes to factors under their control, such as their corporate strategy or their R&D programs. Unfavorable outcomes, by contrast, were more likely to be attributed to uncontrollable external factors such as weather or inflation. Similar self-serving attributions have been found in other studies of annual reports and executive speeches.

We also tend to exaggerate the degree of control we have over events, discounting the role of luck. In one series of studies, participants were asked to press a button that could illuminate a red light. The people were told that whether the light flashed was determined by a combination of their action and random chance. Afterward, they were asked to assess what they experienced. Most people grossly overstated the influence of their action in determining whether the light flashed.

Executives and entrepreneurs seem to be highly susceptible to these biases. Studies that compare the actual outcomes of capital investment projects, mergers and acquisitions, and market entries with managers’ original expectations for those ventures show a strong tendency toward overoptimism. An analysis of start-up ventures in a wide range of industries found, for example, that more than 80% failed to achieve their market-share target. The studies are backed up by observations of executives. Like other people, business leaders routinely exaggerate their personal abilities, particularly for ambiguous, hard-to-measure traits like managerial skill. Their self-confidence can lead them to assume that they’ll be able to avoid or easily overcome potential problems in executing a project. This misapprehension is further exaggerated by managers’ tendency to take personal credit for lucky breaks. Think of mergers and acquisitions, for instance. Mergers tend to come in waves, during periods of economic expansion. At such times, executives can overattribute their company’s strong performance to their own actions and abilities rather than to the buoyant economy. This can, in turn, lead them to an inflated belief in their own talents. Consequently, many M&A decisions may be the result of hubris, as the executives evaluating an acquisition candidate come to believe that, with proper planning and superior management skills, they could make it more valuable. Research on postmerger performance suggests that, on average, they are mistaken.

Managers are also prone to the illusion that they are in control. Sometimes, in fact, they will explicitly deny the role of chance in the outcome of their plans. They see risk as a challenge to be met by the exercise of skill, and they believe results are determined purely by their own actions and those of their organizations. In their idealized self-image, these executives are not gamblers but prudent and determined agents, who are in control of both people and events. When it comes to making forecasts, therefore, they tend to ignore or downplay the possibility of random or uncontrollable occurrences that may impede their progress toward a goal.

The cognitive biases that produce overoptimism are compounded by the limits of human imagination. No matter how detailed, the business scenarios used in planning are generally inadequate. The reason is simple: Any complex project is subject to myriad problems—from technology failures to shifts in exchange rates to bad weather—and it is beyond the reach of the human imagination to foresee all of them at the outset. As a result, scenario planning can seriously understate the probability of things going awry. Often, for instance, managers will establish a “most likely” scenario and then assume that its outcome is in fact the most likely outcome. But that assumption can be wrong. Because the managers have not fully considered all the possible sequences of events that might delay or otherwise disrupt the project, they are likely to understate the overall probability of unfavorable outcomes. Even though any one of those outcomes may have only a small chance of occurring, in combination they may actually be far more likely to happen than the so-called most likely scenario.

Accentuating the Positive

In business situations, people’s native optimism is further magnified by two other kinds of cognitive bias—anchoring and competitor neglect—as well as political pressures to emphasize the positive and downplay the negative. Let’s look briefly at each of these three phenomena.

Anchoring.

When executives and their subordinates make forecasts about a project, they typically have, as a starting point, a preliminary plan drawn up by the person or team proposing the initiative. They adjust this original plan based on market research, financial analysis, or their own professional judgment before arriving at decisions about whether and how to proceed. This intuitive and seemingly unobjectionable process has serious pitfalls, however. Because the initial plan will tend to accentuate the positive—as a proposal, it’s designed to make the case for the project—it will skew the subsequent analysis toward overoptimism. This phenomenon is the result of anchoring, one of the strongest and most prevalent of cognitive biases.

When pessimistic opinions are suppressed, while optimistic ones are rewarded, an organization’s ability to think critically is undermined.

In one experiment that revealed the power of anchoring, people were asked for the last four digits of their Social Security number. They were then asked whether the number of physicians in Manhattan is larger or smaller than the number formed by those four digits. Finally, they were asked to estimate what the number of Manhattan physicians actually is. The correlation between the Social Security number and the estimate was significantly positive. The subjects started from a random series of digits and then insufficiently adjusted their estimate away from it.

Anchoring can be especially pernicious when it comes to forecasting the cost of major capital projects. When executives set budgets for such initiatives, they build in contingency funds to cover overruns. Often, however, they fail to put in enough. That’s because they’re anchored to their original cost estimates and don’t adjust them sufficiently to account for the likelihood of problems and delays, not to mention expansions in the scope of the projects. One Rand Corporation study of 44 chemical-processing plants owned by major companies like 3M, DuPont, and Texaco found that, on average, the factories’ actual construction costs were more than double the initial estimates. Furthermore, even a year after start-up, about half the plants produced at less than 75% of their design capacity, with a quarter producing at less than 50%. Many of the plants had their performance expectations permanently lowered, and the owners never realized a return on their investments.

One of the most robust findings in the psychology of prediction is that people's predictions tend to be optimistically biased. By a number of metrics and across a variety of domains, people have been found to assign higher probabilities to their attainment of desirable outcomes than either objective criteria or logical analysis warrants. Yet the very prevalence of optimistic biases presents an intriguing dilemma: Given that many of the decisions people make, most of their choices, and virtually all plans are based on expectations about the future, it would seem imperative that people's predictions and expectations be free from bias. If the majority of predictions, expectations and performance-relevant perceptions are optimistically biased, how can people make appropriate decisions, or choose effective courses of action?

We review research on optimistic biases in personal predictions and address the question of how people can maintain these biases when doing so would seem to be maladaptive. We begin by reviewing empirical evidence that has shown optimistic biases to be a common feature of people's predictions and expectations. 

One might argue that the clearest demonstrations of optimistic biases are those that have revealed systematic discrepancies between people's predictions and the outcomes they ultimately attain.

Disappointment

Disappointment is the feeling of dissatisfaction that follows the failure of expectations or hopes to manifest. Similar to regret, it differs in that a person feeling regret focuses primarily on the personal choices that contributed to a poor outcome, while a person feeling disappointment focuses on the outcome itself. It is a source of psychological stress. The study of disappointment—its causes, impact, and the degree to which individual decisions are motivated by a desire to avoid it—is a focus in the field of decision analysis, as disappointment is one of two primary emotions involved in decision-making.

Disappointment is a subjective response related to the anticipated rewards. The psychological results of disappointment vary greatly among individuals; while some recover quickly, others mire in frustration or blame or become depressed. In a 2004 article, the journal Psychology Today recommended handling disappointment through concrete steps including accepting that setbacks are normal, setting realistic goals, planning subsequent moves, thinking about positive role models, seeking support, and tackling tasks by stages rather than focusing on the big picture.

A 2003 study of young children with parental background of childhood onset depression found that there may be a genetic predisposition to slow recovery following disappointment. While not every person responds to disappointment by becoming depressed, depression can (in the self psychology school of psychoanalytic theory) almost always be seen as secondary to disappointment/frustration.

Disappointment, and an inability to prepare for it, has also been hypothesized as the source of occasional immune system compromise in optimists. While optimists by and large exhibit better health, they may alternatively exhibit less immunity when under prolonged or uncontrollable stress, a phenomenon which researchers have attributed to the "disappointment effect". The "disappointment effect" posits that optimists do not utilize "emotional cushioning" to prepare for disappointment and hence are less able to deal with it when they experience it. This disappointment effect has been challenged since the mid-1990s by researcher Suzanne C. Segerstrom, who has published, alone and in accord, several articles evaluating its plausibility. Her findings suggest that, rather than being unable to deal with disappointment, optimists are more likely to actively tackle their problems and experience some immunity compromise as a result.

In psychology, frustration is a common emotional response to opposition. Related to anger and disappointment, it arises from the perceived resistance to the fulfillment of individual will. The greater the obstruction, and the greater the will, the more the frustration is likely to be. Causes of frustration may be internal or external. In people, internal frustration may arise from challenges in fulfilling personal goals and desires.

External causes of frustration involve conditions outside an individual, such as a blocked road or a difficult task. While coping with frustration, some individuals may engage in passive–aggressive behavior, making it difficult to identify the original cause(s) of their frustration, as the responses are indirect. A more direct, and common response, is a propensity towards aggression.

 Causes:

To the individual experiencing anger, the emotion is usually attributed to external factors that are beyond one's control. Although mild frustration due to internal factors is often a positive force (inspiring motivation), it is more often than not a perceived uncontrolled problem that instigates more severe, and perhaps pathological anger. An individual suffering from pathological anger will often feel powerless to change the situation they are in, leading to and, if left uncontrolled, further anger.

It can be a result of blocking motivated behavior. An individual may react in several different ways. He/she may respond with rational problem-solving methods to overcome the barrier. Failing in this, he/she may become frustrated and behave irrationally. An example of blockage of motivational energy would be the case of the executive who wants a promotion but finds he/she lacks certain qualifications. If, in these cases, an appeal to reason does not succeed in reducing the barrier or in developing some reasonable alternative approach, the frustrated individual may resort to less adaptive methods of trying to reach the goal. He/she may, for example, attack the barrier physically, verbally, or both.

Some people are predisposed towards feelings of frustration, indexed in terms of temperament (frustration) across adolescence and neuroticism in adulthood. Temperamental frustration is associated with perceptual alterations including changes in perceived relationship affection.

Frustration can be considered a problem–response behavior, and can have a number of effects, depending on the mental health of the individual. In positive cases, this frustration will build until a level that is too great for the individual to contend with, and thus produce action directed at solving the inherent problem. In negative cases, however, the individual may perceive the source of frustration to be outside of their control, and thus the frustration will continue to build, leading eventually to further problematic behavior (e.g. violent reaction).

Stubborn refusal to respond to new conditions affecting the goal, such as removal or modification of the barrier, sometimes occurs. As pointed out by J.A.C. Brown, severe punishment may cause individuals to continue nonadaptive behavior blindly: "Either it may have an effect opposite to that of reward and as such, discourage the repetition of the act, or, by functioning as a frustrating agent, it may lead to fixation and the other symptoms of frustration as well. It follows that punishment is a dangerous tool, since it often has effects which are entirely the opposite of those desired".

It's human to feel disappointed now and then. As an optimist I tend to hope for the best in situations. It doesn't always work out the way I want. Having had my share of disappointments, I've become more aware of my expectations and learned how to hold them in check. We become disappointed when our expectations of persons, situations or things are unrealistic and not met.

In a circumstance with an uncertain outcome we naturally create expectations as a way of creating some certainty for ourselves. An expectation is a thought or a belief that is about our expected outcome, not necessarily about what might really happen. We have beliefs about ourselves that can turn into expectations about a desired outcome because they reinforce our beliefs about ourselves. When we are surprised by the outcome we are disappointed or frustrated because they undermine our beliefs.

Expectations create small crises that we forget about in a few days, or they can create massive fissures that last a lifetime and require the attention of professionals. Dawn Binkowski, a Gestalt psychotherapist, notes that: "In my practice, I deal with clients who were told by their parents that they were destined for greatness. When that doesn't happen, they become lost, especially when there's no backup plan. Dealing with disappointment and mediocrity can be a huge challenge." There are two sides to expectations. We have to manage our own expectations and we have to be aware of others' expectations of us. Disappointment is a two-way street.

High expectations are at the core for perfectionists who set unrealistically high expectations for themselves. As Dawn points out, "they are always focusing on what's wrong and as a result, feel anxiety, and obsess. This creates a self-fulfilling prophecy and an endless cycle of high expectations leading to low self-esteem and increased anxiety."

Managing our expectations is important for a number of reasons, the main one being our own sense of happiness. The less disappointment we face, the happier we are. The second most important reason is that our expectations tend to create demands, requests or orders on other people, which causes stress in relationships. The more we face disappointment, the more unhappy, unmotivated and stressed we become. So instead of curling up into a fetal position and giving up, there is a better solution: becoming aware of and modifying your expectations.

Our expectations stem from our beliefs and our beliefs flow from our needs. If I am lonely and call up a friend, I have an expectation that he will relieve my loneliness. If at the last minute he cancels, I will be disappointed, because he isn't going to fix my problem. Notice that it's not his problem and he's probably fine with the situation. If I understand that I have made a request to my friend and if I allow him to make his own choice, I can be okay with what ever happens. I will have to find another way to solve my problem. It would be worse if I'm explicit with my expectation of him because that creates a demand on him. It causes pressure on the relationship and if he still bails, then the disappointment is greater knowing I made a demand that was rebuffed. Sometimes disappointment can really hurt when it touches the ego and we take it personally.

People who are inured to hardship tend to have low expectations. When with a little effort, expectations are realized, they are happier. Conversely, wealthier people tend to have higher expectations that often are not met. As a result, they tend to be unhappier. The paradox of expectations helps us to understand why people in some of the poorer countries in the world test higher for happiness than those in wealthier countries.

For our own sanity and happiness, managing our expectations is a better choice than continually being disappointed or giving up. Here are eight steps that will help you begin to short circuit your process of creating unrealistic expectations:

1. Become aware of expectations you are creating.
2. Understand the beliefs behind your expectations.
3. What are your needs in the situation? Are there other ways to meet them?
4. Is your expectation a reasonable or a likely outcome?
5. When your expectation turns out to be incorrect, notice and adjust accordingly.
6. When you are disappointed, don't take it personally.
7. Stay flexible: What other options do you have?
8. Be okay with "what is."

Our disappointment should be turned on its head: Instead of being disappointed with an outcome, we really should be disappointed in our own unrealistic expectations. We can ask for things but we don't always get them. When you adjust your expectations to fit reality, you are much less likely to experience disappointment. In time, it will become a rarer occurrence. You don't have to give up hope. We can still anticipate a good outcome, just be ready to be okay with "what is" and accept it. As the old saying goes: "Don't count your chickens before they've hatched."