A person who habitually overestimates the likelihood of a positive outcome, and makes decisions based on that personal outlook, is demonstrating:

• A. Pessimism bias
• B. Optimism bias
• C. Self-serving bias
• D. Availability bias

Answer: (B)

This question tests optimism bias, the tendency to overestimate the likelihood of positive outcomes and to base decisions on that rosy expectation. When someone consistently expects things to turn out well, they may downplay risks and ignore potential downsides, guiding choices by that favorable outlook. That matches the scenario of habitually overestimating positive outcomes and making decisions accordingly. Pessimism bias would involve expecting negative results or emphasizing downsides; self-serving bias is about taking credit for successes and deflecting blame for failures; availability bias is about judging likelihood based on information that’s readily recalled. So the described pattern is best explained by optimism bias.