Rational brain · Judgment & Decision Science
Optimism Bias
Most people expect better outcomes for themselves than for comparable others, and update less on bad news than good; it fuels ventures, and it is what every 'this time is different' pitch relies on.
An everyday example
Every founder's plan assuming above-median outcomes on every line.
What it can cost you
Under-weighting the base rate for you specifically; being sold the exception.
Warning signs
- It will work out for me.
- I have not looked at what happened to others.
One thing to do
Take the outside view: start from what happened to similar people and adjust only for evidenced differences.
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