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date: 25 February 2024

optimism bias 

Source:
A Dictionary of Business and Management
Author(s):

Jonathan Law

The tendency for people to be optimistic about future events, especially those seen as following from their own plans and actions. Studies have suggested that this is a universal cognitive bias, possibly with a biological origin. Although optimism may be a stimulus to enterprise, it has obvious dangers: these include increased risk taking (including neglect of basic precautions), failure to estimate probabilities accurately, and inadequate contingency planning. In drawing up plans, schedules, and budgets there is a demonstrated tendency for managers to underestimate costs and duration and to overestimate benefits (... ...

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