About 0.3 percent of his projection error resulted from general overoptimism
In a housing bubble, overoptimism
about future house prices causes financial institutions to underestimate the probability of default, thereby diluting the incentives created by such indirect regulation.
at the planning stage relative to the nowcast is larger for real output growth than for nominal output growth, because inflation is projected too low.
relatively high percentage of cooperation renders overoptimism
(122) Jolls, Sunstein and Thaler also point to overoptimism
as a source for miscalculations of the probability of a bad outcome of certain events.
Both banking crisis episodes illustrate a model of financial development and crisis where an exogenous shock to the expectations of economic agents, interacting with the provision of credit by financial institutions can lead ultimately to overoptimism
, speculation and mania, creating vulnerabilities that then become cruelly exposed following some negative shock.
(44) Rollo opens by replicating this sense that uneducable nature, bad estate planning on the part of the late ruler, and overoptimism
about Rollo's mentality have combined to make an untenable situation.
But they reported: "Persistent overoptimism
and under-estimation of the technical challenge, combined with inappropriate commercial arrangements, led to burgeoning costs and serious delays." Mr Leigh said: "It will enter service with not one of its main PAAMS anti-air missiles having been fired from the ship and not be fully operational until 2011." The report said, because of such delays, the outdated Type 42 destroyers are having to be "patched up" and kept in service for longer.
Similarly, people do not change jobs very often (32) and therefore have limited opportunity to obtain feedback that counteracts their overoptimism
. In the credit card context, by contrast, individuals have the opportunity to learn each time they receive their monthly statement.
(2000) provide evidence in support of role of investor overoptimism
in explaining the long-run underperformance.
The generally high aggregate rates of return on late 1970s free agent contracts suggest this "overoptimism
bias" might not have been quantitatively significant during this early period.
To conclude, we add a warning against overoptimism
. Even if one would succeed completely in identifying subsets of binary items such that the resulting testlet seores are locally independent, this does not imply that the PCM at the testlet score level is the correct model.