Optimism bias is the difference between a person’s expectation and the resulting outcome. Around 80 percent of people have an optimism bias—so it appears to be an integral part of human nature.Optimism bias can have both positive and negative effects. First, optimism may be beneficial for physical health as one study reported that optimists are 14 percent less likely to die before age 65 and 30 percent less likely to die from cardiac arrest. Optimism also reduces stress and anxiety, which can have positive long-term effects on one’s health.

“Positivism is also a reflection of having a healthy or positive outlook that can lift the mood when people are going through difficult situations, where they are able to see the other side of the coin,” Ms. De Los Santos explained.

On the other hand, excessive optimism can lead people to make decisions that may cause harm in the future, including risky financial decisions, unprotected sex, substance use, etc. The backlash of the subsequent consequences can come at a significant personal cost.

“People with an optimism bias may be very confident in their abilities, specifically in the financial decisions they make, not recognizing that they may have weaknesses in not knowing the moves they are making,” Ms. De Los Santos confirmed. “Overconfidence is beneficial for self-esteem, but it can also lead to failure.”

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Optimistic Mindset Linked to Poor Decision-Making