We assume that we will make more money than others. We assume our relationships will last longer than they realistically might. We assume that projects will be completed in shorter amounts of time than they actually are. 1 However, as seen in Tom’s case, there are large costs to the optimism bias in our personal and professional lives. Research consistently supports that most of the population (estimated around 80%) exhibit an optimistic bias that arises in a variety of circumstances. Even though the past six businesses failed and environmental factors were working against him, Tom overestimated his chances for success and showed overconfidence in his abilities as an entrepreneur. In this scenario, Tom exhibits the optimism bias. However, like the businesses before his, Tom’s restaurant is not cultivating enough business. ![]() Yet Tom still feels that with his know-how, he can circumvent these issues. A friend even tells him that the street layout and surrounding competition simply made it difficult for pedestrians to be drawn into the area. Tom pours his time and financial resources into the venture, refusing to accept failure as an option or yield to potential shortcomings. He was at the top of his class, full of big ideas, and understood the pulse of young city-goers. However, Tom felt as though he had what it took to make this restaurant succeed. Each venture was unable to get the necessary returns to stay afloat and were forced to close. ![]() There had previously been six failed business attempts in the building he purchased. Consider the following scenario: Tom is a bright and motivated entrepreneur who is in the midst of starting his own restaurant.
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