||It has been suggested that this article be merged into Optimism bias. (Discuss) Proposed since May 2016.|
The valence effect of prediction is the tendency for people to simply overestimate the likelihood of good things happening rather than bad things. Valence refers to the positive or negative emotional charge some entity possesses.
This finding has been corroborated by dozens of studies. In one straightforward experiment, all other things being equal, participants assigned a higher probability to picking a card that had a smiling face on its reverse side than one which had a frowning face.
The outcome of valence effects may be called wishful thinking. However, in certain situations, the valence effect may actually alter the event in some way so that it indeed results in a positive outcome. For example, in some cases generals have roused up their soldiers to a point where they were able to emerge victorious in battle.
- Taylor, Nigel, Making Actuaries Less Human: Lessons from Behavioral Finance. The Staple Inn Actuarial Society, 2000-01-18. Last accessed on 2009-03-16.
- Rosenhan, David; Messick, Samuel (1966). "Affect and expectation" (PDF). Journal of Personality and Social Psychology. 3 (1): 38–44. doi:10.1037/h0022633.
- Taylor, Nigel (2000). Making Actuaries Less Human. Staple Inn Actuarial Society, 15. For picking a card see section 6.2 on page 15.