People who are optimistic are more likely than others to display prudent financial behaviors, according to new research from Duke University’s Fuqua School of Business.

But too much optimism can be a problem: people who are extremely optimistic tend to have short planning horizons and act in ways that are generally not considered wise.

Manju Puri and David Robinson, professors of finance at Duke, report in the October 2007 issue of the Journal of Financial Economics that the differences between optimists and extreme optimists provide important insights into the interaction between psychology and economic and lifestyle choices.

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