Psychology of Misjudgment #13. Over-optimism Tendency

[LongHaul]

13. Over-optimism Tendency

"Demosthenes, the most famous Greek Orator, said, “What a man wishes, that also will he believe.”

 

Demosthenes, parsed out, was thus saying that man displays not only Simple, Pain-Avoiding Psychological Denial but also an excess of optimism even when he is already doing well."

 

"How many people blindly buy stocks without doing any work because they absolutely believe they’ll make money? The force that drives people to believe the stock market, casinos, or lotteries are the source for quick riches is excessive optimism. Understanding simple probabilities is a great reminder of how little control we have over the future."

 

 

I think this is very related to Excessive self regard and perhaps they are really both a form of Overconfidence Bias.

 

Overconfidence bias summary from Wikipedia has been defined in 3 ways.

 

1.  Overestimation of one's actual performance.

2.  Overplacement of one's relative performance.

3.  Overprecision in the accuracy of one's beliefs.

 

 

https://en.wikipedia.org/wiki/Overconfidence_effect

 

 

Of course we are not seeing ANY Over Optimism or Overconfidence among todays gamblers in the stock market.

(I am 100% certain of my opinion of this ;)  )