Neither an Optimist Nor a Pessimist Be: Mistaken Expectations Lower Well-Being.

David De Meza,Chris Dawson

doi:10.1177/0146167220934577

Abstract

This article speaks to the classic view that mental health requires accurate self-perception. Using a representative British sample (N = 1,601) it finds that, as measured by two established well-being indicators, those with mistaken expectations, whether optimistic or pessimistic, do worse than realists. We index unrealistic optimism as the difference between financial expectations and financial realizations measured annually over 18 years. The effects are not small, with those holding the most pessimistic (optimistic) expectations experiencing a 21.8% (13.5%) reduction in long-run well-being. These findings may result from the decision errors and counteracting emotions associated with holding biased beliefs. For optimists, disappointment may eventually dominate the anticipatory feelings of expecting the best while for pessimists the depressing effect of expecting doom may eventually dominate the elation when the worst is avoided. Also, plans based on inaccurate beliefs are bound to deliver worse outcomes than would rational expectations.

Highlights

—Jane Austen, Sense and Sensibility. Is it best to expect the best? Research into dispositional optimism—generalized outcome expectancies that good things will happen (Scheier et al, 1994)—finds that positive beliefs are fundamental for a variety of different positive psychological and physical health-relevant outcomes (Scheier & Carver, 1987, 1992, 1993)
Unrealistic optimism has been found to be one of the most pervasive human traits, with studies consistently reporting that a large majority of the population display an optimism bias (Sharot, 2011)
For life satisfaction (LS), those holding the most pessimistic expectations are associated with a 21.8% (13.5%) reduction in well-being when compared with realists

Summary

Introduction

Is it best to expect the best? Research into dispositional optimism—generalized outcome expectancies that good things will happen (Scheier et al, 1994)—finds that positive beliefs are fundamental for a variety of different positive psychological and physical health-relevant outcomes (Scheier & Carver, 1987, 1992, 1993). A finding that positive beliefs are associated with higher wellbeing may partly reflect the realistic expectation of people likely to have positive experiences. Contact with reality and unbiased assessments of probabilities are traditionally viewed as being beneficial According to this perspective, decisions based on accurate, objective, and unbiased evidence must maximize expected utility.. Depending upon the intensity of anticipatory emotions, loss aversion and the costs of distorted decision making, optimistic, pessimistic, or even realistic beliefs could emerge as utility maximizing. We have some arguments that unrealistic optimism is likely to be domain-general, all we can rigorously claim is that realism over financial forecasts is associated with higher well-being, measured by life satisfaction and psychological distress, than is unrealistic optimism or pessimism

Participants

Results

Discussion