London,
(ONA) — A new study from the University of Bath suggests that excessive optimism is associated with lower cognitive skills and can result in poor decision-making, especially in financial matters.
Published in the Personality and Social Psychology Bulletin, the research indicates that individuals with high cognitive ability tend to be more realistic and pessimistic about the future.
Dr. Chris Dawson of the University’s School of Management explains that low cognitive ability leads to self-flattering biases, with individuals deluding themselves.
Plans based on overly optimistic beliefs, particularly in major financial decisions, such as employment, investments, or savings, are likely to yield worse outcomes than realistic beliefs.
The study, based on a survey of over 36,000 households, reveals a 22% increase in the probability of “realism” and a 35% decrease in the probability of “extreme optimism” among those with higher cognitive ability.
The findings challenge the pervasive concept of ‘positive thinking’ and emphasize the importance of realistic expectations
