
Give’em enough rope: perceptions of health and safety risks in bungee jumpers. Journal of Social and Clinical Psychology, 15(1), 9–52. Sufficient grounds for optimism?: The relationship between perceived controllability and optimistic bias. The Journal of Political Economy, 108(3), 604–631. Does entrepreneurship pay? An empirical analysis of the returns of self-employment. Journal of Personality and Social Psychology, 69(2), 213–226. Effects of mindset on positive illusions. Journal of Personality and Social Psychology, 56(4), 531–542. Effects of deliberative and implemental mindsets on illusion of control. Personality and Social Psychology Bulletin, 30(2), 149–160. Optimism, pessimism, and gambling: The downside of optimism. Tversky (Eds.), Judgment under uncertainty: Heuristics and biases (pp. Objective 3-Policy field 4-Adaptability and entrepreneurship. New York: Dun and Brastreet.Įuropean Commission. Patterns of success in managing a business. New move means thousands of small businesses become eligible for loan guarantee scheme. Griffiths unveils new proposals to boost budding businesses-Women, ethnic minorities, and disadvantaged areas targeted for new start-ups. Journal of Business Venturing, 3(2), 97–108.ĭepartment of Trade and Industry. Entrepreneurs’ perceived chances for success. Risk perception: Differences between adolescents and adults. L., Macfarlane, S., Yanez, C., & Imai, W. International Tax and Public Finance, 11(special issue on public finance and capital markets), 391–417.Ĭohn, D. Irrational exuberance, entrepreneurial finance and public policy. Mimeo: London School of Economics.Ĭoelho, M. Self deception, self selection, self destruction: Experimental evidence against adverse selection. thesis, London School of Economics and Political Science.Ĭoelho, M., & de Meza, D. Unrealistic optimism, entrepreneurship and adverse selection. Overconfidence and excess entry: An experimental approach. University of Pennsylvania Law Review, 151(3), 1211–1254.Ĭamerer, C., & Lovallo, D. Regulation for conservatives: Behavioral economics and the case for “asymmetric paternalism”. Personality and Social Psychology Bulletin, 18(1), 39–43.Ĭamerer, C., Issacharoff, S., Loewenstein, G., O’Donoghue, T., & Rabin, M. Changes in and generalization of unrealistic optimism following experiences with stressful events: Reactions to the 1989 California earthquake. Englewood Cliffs, NJ: Prentice-Hall.īurger, J. Vesper (Eds.), The encyclopedia of entrepreneurship (pp. Journal of Experimental Social Psychology, 37(5), 373–385.īrockhaus, R. The return to independent invention: Evidence of risk seeking, extreme optimism or skewness-loving? The Economic Journal, 113(484), 226–239.īlanchflower, D. And a vision appeared unto them of a great profit: Evidence of self-deception among self-employed. Methodology/approachĬritical review of the existing literature on unrealistic optimism and its implications for economic and managerial decision making.Īrabsheibani, G., de Meza, D., Maloney, J., & Pearson, B. Originality/valueĪ careful analysis of the psychology of over-optimism from an economics and managerial perspective is original and extremely valuable in a world where uncertainty dominates. Since the policy and welfare implications of such a (neglected) widespread phenomenon are vast, we challenge the current public policy trend of extending lending to business start-ups, on the grounds that it may create a real road to ruin. We show that most people are prone to groundless optimism when faced with economic and managerial decisions and yet economists, managers and policy makers still ignore it or fail to understand its characteristics. We also analyze current trends in terms of entrepreneurship by policy makers. The purpose of this study is to take a critical approach of the main research done in the area and to analyze the important impact that it has in many economic and managerial contexts.

Unrealistic optimism is all around us, and it is a well-documented psychological phenomenon.
