In order to be wildly successful, you need to be optimistic and overconfident about your chances. But for the average person, being so out of touch with reality can lead to failure.
That's according to Daniel Kahneman, a Nobel Prize-winning psychologist, who calls it a "paradox" of success.
Still, in some cases, overconfidence can indeed help you, especially if you're a leader.
Since I heard Daniel Kahneman speak at the World Business Forum this year, I haven't stopped thinking about one particular point he raised.
Kahneman is a Nobel Prize-winning psychologist and the author of the 2011 bestseller "Thinking, Fast and Slow," in which he outlined a series of cognitive biases that affect our everyday decisions.
At WBF, Kahneman spoke about a "paradox" of success: You probably can't be wildly successful unless you're optimistic and overconfident about your chances. But generally speaking, optimism (the belief that you're less likely than others to experience bad events and more likely to experience positive events) and overconfidence (an inflated sense of accuracy or ability in a specific area) are career saboteurs.
RELATED: Check out the cities with the most job openings:
12 cities with the most job openings
12 cities with the most job openings
12. Jobs in Phoenix
Job openings: 13,409
Current growth in Phoenix is slower than it was during past booms, but the economy is still creating jobs. The Phoenix metro area is chock-full of small businesses — 96 percent of the region's 126,000 businesses have 50 or fewer employees.
The leisure and hospitality sector is booming, with growth of 7.1 percent from July 2016 to July 2017, according to the U.S. Bureau of Labor Statistics. The next fastest-growing sector was construction, with 3.5 percent growth over the same time frame.
11. Jobs in Denver
Job openings: 13,958
The chief economist for the Metro Denver Economic Development Corporation, Patty Silverstein, forecasts strong job growth continuing for Denver after a "stellar" 2016. The Denver job growth forecast is 2.4 percent in 2017, with four sectors posting strong employment growth:
Leisure and hospitality
Education and health services
Natural resources and construction
Strong economic activity and net migration are expected to push home prices higher, which could have positive, ancillary benefits on the economy.
10. Jobs in Boston
Job openings: 14,631
Boston is a college town, home to prestigious institutions likes Harvard University, Massachusetts Institute of Technology and Boston College. In fact, as of 2016, the city had the largest concentration of top-tier research universities in the country.
Boston also has a number of the country's best hospitals, including Massachusetts General. Thus, it is no surprise that the highest level of employment in the city is in education and health services.
9. Jobs in Dallas
Job openings: 15,057
Dallas is a bright spot in the Texas economy. Economic growth over the next five years is expected to reach 4.2 percent per year, according to the city's economic forecast.
Dallas is a key driver of economic growth in the state, according to the Dallas Chamber of Commerce. The city is blessed with a diverse economy and its business concentrations are in logistics, technology and corporate headquarters.
8. Jobs in San Francisco
Job openings: 15,972
San Francisco is the fourth most-populated state in California and it runs neck-and-neck with Los Angeles when it comes to having the most job openings.
With a well-known concentration of financial services companies, including Wells Fargo and Charles Schwab, it should be no surprise that the professional and business services industry is No. 1 when it comes to employment in San Francisco.
7. Jobs in Los Angeles
Job openings: 17,061
Los Angeles is the capital of the world for show business — and it's the largest city in the state. As a result, the city's economy is naturally large and diversified.
Away from the glitz and glamour of Hollywood, Los Angeles is also the home to the nation's No. 1 container port, which makes trade its top industry.
Education and health services come in a close second.
6. Jobs in Seattle
Job openings: 17,576
Seattle's economy is well-rounded, which results in many job opportunities. Seattle offers employment in a variety of industries, ranging from trade to transportation and utilities to professional and business services to government to education and health services, according to the U.S. Bureau of Labor Statistics.
Seattle's economic development plan focuses on "business cluster development," or the effort to align companies in a geographic area that work in the same industry. The city believes that this type of coordinated, economic development activity is the key to Seattle's economic growth.
5. Jobs in Washington, D.C.
Job openings: 18,541
As befitting the nation's capital, government jobs in DC make up the largest employment sector. The city also offers high levels of employment in the fields of professional and business services and education and health services.
The city has several organizations and agencies that focus on potential economic development opportunities, and it has initiatives designed to develop small business owners.
4. Jobs in Houston
Job openings: 19,564
Although Houston's economic situation might change in the aftermath of 2017's Hurricane Harvey, it stands at No. 4 on this list of cities with the most job openings. According to the U.S. Bureau of Labor Statistics, the industries with the most workers in Houston are:
Transportation and utilities
Professional and business services
Leisure and hospitality
The city's economic development plan identifies the energy, manufacturing and medical sectors with the most robust growth.
3. Jobs in Atlanta
Job openings: 20,712
Atlanta's two main industries — in terms of the percentage of the population that is employed in those fields — are sales, administrative support, management, business and finance. The city, however, also employs those in the science, education, library, engineering and computer sectors at a rate above the national average.
The city's most recent Comprehensive Development Plan was adopted on Nov. 21, 2016, to further economic growth in the city. Invest Atlanta, the city's development authority, is focused on growing residential and commercial economic vitality in the city.
2. Jobs in Chicago
Job openings: 25,104
Chicago, has the second-highest number of job openings on the list. Chicago's economy is guided by an economic development plan entitled, "A Plan for Economic Growth and Jobs," created by World Business Chicago and the city's mayor, Rahm Emanuel.
Chicago's diverse economy has 13 key industries:
Plastics and chemicals
1. Jobs in New York
Job openings: 37,428
New York City boasts a growing, diverse economy that has many growing industries, hence its No. 1 position in this list of cities with job openings.
New York's core businesses include technology, fashion, food manufacturing, food retail, healthcare, industrial and manufacturing, life sciences and urban innovation and sustainability.
New York is particularly booming when it comes to the startup sector, which accounts for more than 291,000 jobs and more than $124 billion in economic output.
Discover More Like This
BACK TO SLIDE
It's the difference between, say, the Elon Musks and Jeff Bezoses of the world and the rest of us.
"To be optimistic on average — it's not favorable," Kahneman said. But "extreme success is impossible without optimism."
Kahneman pointed to a 2007 paper published in the Journal of Behavioral Decision Making.
Researchers looked at a group of inventors in Canada and found that above-average optimists who were advised not to pursue their project ended up spending 166% more money than below-average optimists did when they received the same advice. (The researchers found that overconfidence didn't have an effect on the inventors' spending behavior, but that may have been because they didn't specifically measure the inventors' confidence in their abilities.)
Based on their findings, the researchers surmise that "a high level of optimism may act to keep inventors going in the face of adversity" — which is either a laudable or completely impractical behavior depending on your perspective.
As Kahneman described it, the average inventor would have been better off financially heeding the negative advice and taking a more traditional job; but the most successful inventors would not have.
In some circumstances, overconfidence can be beneficial
A more recent study provides some preliminary evidence that, at least among entrepreneurs, optimism can backfire.
The study, which was published in the journal European Economic Review, found that above-average optimists who are self-employed earn 30% less than below-average optimists who are self-employed. Interestingly, however, the study also found that optimists who work for companies earn more than their more pessimistic peers.
Still, there are some circumstances in which overconfidence in particular can work to your benefit. An article in the Harvard Business Review describes a studythat found, at firms led by overconfident CEOs, there tends to be lower employee turnover and employees allocate a greater share of the assets in their retirement benefit plans to company stock.
The authors write in The Harvard Business Review, "At least in the corporate world, there may be a bright side to overconfidence: it can increase the commitment of other people to your venture."
As for Kahneman, he called optimism the "engine of capitalism." He said, "When you have lots of people trying things against the odds, it's not very good for most of them. Most of them will fail. But it's very good for society at large to have a lot of people competing and a few of them succeed."