Everyone indulges in wishful thinking now and again. But when is that most likely to happen, and when could it actually be harmful? A new study led by the University of Amsterdam (UvA) demonstrates unequivocally that the greater the insecurity and anxiety of a situation, the more likely people are to become overly optimistic—even to the point where it can prevent us from taking essential action. The study's results have now been published in the journal American Economic Review.