Wishful Thinking

Wishful thinking is the formation of beliefs and making decisions according to what might be pleasing to imagine instead of by appealing to evidence, rationality, or reality. Studies have consistently shown that holding all else equal, subjects will predict positive outcomes to be more likely than negative outcomes (see valence effect).

On the other hand, some psychologists believe that positive thinking is able to positively influence behavior and so bring about better results. They call it "Pygmalion Effect".

Christopher Booker described wishful thinking in terms of

“the fantasy cycle” ... a pattern that recurs in personal lives, in politics, in history – and in storytelling. When we embark on a course of action which is unconsciously driven by wishful thinking, all may seem to go well for a time, in what may be called the “dream stage”. But because this make-believe can never be reconciled with reality, it leads to a “frustration stage” as things start to go wrong, prompting a more determined effort to keep the fantasy in being. As reality presses in, it leads to a “nightmare stage” as everything goes wrong, culminating in an “explosion into reality”, when the fantasy finally falls apart.