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[[Image:lighterstill.jpg]][[Image:Valence.jpg|right|frame]]

[[Image:lighterstill.jpg]][[Image:Valence.jpg|right|frame]]

The '''Valence effect''' in [[prediction]] is the tendency for people to overestimate the likelihood of good [[things]] happening rather than bad things. Valence refers to the positive or negative [[emotion]]al charge related to a given [[contingency]]. In one [[experiment]],  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.[1] Additionally, some have reported a valence effect when predictions demonstrate the likelihood of positive events happening to ourselves [[relative]] to others and is an example of self-serving bias.

The '''Valence effect''' in [[prediction]] is the tendency for people to overestimate the likelihood of good [[things]] happening rather than bad things. Valence refers to the positive or negative [[emotion]]al charge related to a given [[contingency]]. In one [[experiment]],  participants assigned a higher [[statistics|probability]] to picking a card that had a smiling face on its reverse side than one which had a frowning face.[1] Additionally, some have reported a valence effect when predictions demonstrate the likelihood of positive events happening to ourselves [[relative]] to others and is an example of self-serving bias.

The result of valence effects may be called [[wishful thinking]]. However, in some cases, positive outcome bias may actually alter events in some way so that it indeed results in a positive outcome. Examples of this have been known to occur in [[war]], when commanding officers have inspired their soldiers such that they are able to emerge victorious.

The result of valence effects may be called [[wishful thinking]]. However, in some cases, positive outcome bias may actually alter events in some way so that it indeed results in a positive outcome. Examples of this have been known to occur in [[war]], when commanding officers have inspired their soldiers such that they are able to emerge victorious.

==Citation==

==Citation==

# Nigel Taylor (2000-01-18). "Making Actuaries Less Human: Lessons from  

# Nigel Taylor (2000-01-18). "[https://www.google.com/url?sa=t&ct=res&cd=2&url=http%3A%2F%2Fwww.sias.org.uk%2Fdata%2Fpapers%2FBehaviouralFinance%2FDownloadPDF&ei=Srw4RpzQLpPEiwGhu7TkDA&usg=AFrqEze1605hIFtf9inCo5FHPZZTeq-DTQ&sig2=lg65w26FFzNGNf232y9ToA Making Actuaries Less Human: Lessons from Behavioral Finance" (PDF). The Staple Inn Actuarial Society].

 

==References==

==References==

* [[David Rosenhan & Messick, S. (1966). Affect and expectation. ''Journal of Personality and Social Psychology'' '''3''', 38-44.

* David Rosenhan & Messick, S. (1966). Affect and expectation. ''Journal of Personality and Social Psychology'' '''3''', 38-44.

* Nigel Taylor (2000). [http://www.google.com/url?sa=t&ct=res&cd=2&url=http%3A%2F%2Fwww.sias.org.uk%2Fdata%2Fpapers%2FBehaviouralFinance%2FDownloadPDF&ei=Srw4RpzQLpPEiwGhu7TkDA&usg=AFrqEze1605hIFtf9inCo5FHPZZTeq-DTQ&sig2=lg65w26FFzNGNf232y9ToA Making Actuaries Less Human]. Staple Inn Actuarial Society, 15. ''For picking a card see section 6.2 on page 15.''

* Nigel Taylor (2000). [https://www.google.com/url?sa=t&ct=res&cd=2&url=http%3A%2F%2Fwww.sias.org.uk%2Fdata%2Fpapers%2FBehaviouralFinance%2FDownloadPDF&ei=Srw4RpzQLpPEiwGhu7TkDA&usg=AFrqEze1605hIFtf9inCo5FHPZZTeq-DTQ&sig2=lg65w26FFzNGNf232y9ToA Making Actuaries Less Human]. Staple Inn Actuarial Society, 15. ''For picking a card see section 6.2 on page 15.''

[[Category: Psychology]]

[[Category: Psychology]]