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Core Thinking

Optimism Bias

Social-cognitive bias

Definition

The tendency to overestimate the likelihood of positive events happening to you and underestimate the likelihood of negative events.

Why it happens

A moderate level of optimism is adaptive — it motivates action and resilience. But our brains often take it too far, leading us to underestimate real risks.

Real-life examples

  • Believing your startup will succeed despite the high failure rate.
  • Underestimating how long a home renovation project will take.
  • Thinking 'it won't happen to me' about health risks despite not exercising.

How to counter it

  1. Research base rates — how often do similar plans succeed or fail?
  2. Add a 30-50% buffer to all time and cost estimates.
  3. Run a pre-mortem: assume the plan failed and identify reasons.
  4. Ask a skeptical friend or colleague to challenge your assumptions.

Quick tips

  • Use base rates: look at how often things succeed or fail in general.
  • Build buffer time and budget into all plans.
  • Ask a pessimistic friend to poke holes in your plan.
  • Practice 'pre-mortem' thinking: imagine your plan failed — why did it fail?

Sources and further reading

Related biases