1. Some consequences of biased expectations
Chris Dawson
School of Management

2. Optimism – overestimation of favourable outcomes
For economists:
Rational expectations “best”
Optimism distorts the decision making process

3. Men have more of it than women!!
Especially when it comes to assessing our ability and future prosperity
Receiving £10 when expecting £5 feels pleasing; receiving £10 when expecting £100 feels disappointing.

4. Why are women less optimistic?
Choose beliefs that Maximise Utility
Optimism is a trade-off between future disappointment for current savouring
For men: Savouring>Disappointment
For women: Savouring<Disappointment

5. Migrant work ethic A8 expansion of the EU (2004)
UK gave full access to workers from the A8 nations to work without restriction. Decision influenced by original predicted figure of increased migration of 8000 and 13,000
These migrants famed by a higher work ethic than natives