The world is your oyster! Sort of. (AP Photo/Emily Varisco)

"Reach for the stars" is the sort of uplifting advice parents impart on their children, coaches pass along to their players, and people all over the place repeat to themselves. And for good reason: A life outlook that, generally speaking, assumes the best, has many tangible benefits. Positive thinking has been linked to better relationships, increased happiness, and health.

But optimism has its limits. In fact, it can be a pretty wasteful way to approach life.

"As a rule, you'll get the advice that it's better to be optimistic," said Don Moore, a professor at the Berkeley Haas School of Business, who studies overconfidence and how it affects people's lives. "But the truth is that it makes no difference. Sometimes it's even worse."

Moore's most recent research, a study published last month, explores this very tension: between the perceived benefits of optimism, and the actual results the attitude produces. Moore, along with his colleague Jennifer Logg and Elizabeth Tenney, who teaches at the University of Utah, tested the notion that optimism pays off through a series of five experiments. In one, the researchers tested how often people favored optimism; in another, they gauged how much people associated the mentality with better outcomes; and in the remaining three, they put the positive outlook to test, measuring whether optimism actually leads to improved performances.

What they found are essentially three things.

The first is that people tend to believe that optimism boosts the likelihood of success. Not only were participants more likely to say that positive thinking helps boost motivation—they also associate the mentality with positive outcomes.

The second is that when people believe that they can do something—rightly or wrongly—they tend to try harder, or at least for longer, to accomplish it. In one experiment, for instance, participants spent a good deal longer looking for Waldo in Where's Waldo when they were convinced they would find him.

The third and most sobering of the three findings is that in every case optimism didn't produce any measurable improvement in performance. Those people who kept their head up and spirits high, looking longer and more intently for Waldo, still didn't find him. Nor did those who took part in two other experiments which tested how optimism affects outcome show any tangible improvement in performance.

"What we can conclude is that there are lots of instances in which people think optimism will be helpful, but that belief is often misplaced," said Moore.

Optimism isn't merely unhelpful at times—it can be demonstrably counterproductive. Telling someone "you can do it" when they actually can't doesn't change the outcome, and it makes them more likely to exert time and effort on a fruitless task. There might be no clearer example than the fact that optimists spend more time looking for Waldo, but are no more likely to find him.

Part of the problem is that people are prone to confuse correlation for causation, says Moore. Sports, in particular, are a domain where it's easy to look at a success story, and glean that an athlete has benefited from over-confidence, when in fact what has happened is the athlete believes he or she will make a shot or score a goal because the likelihood is that they will, and then does for the exact same reason.

"It's realism disguised as optimism," said Moore.

The other issue is that people might simply be too optimistic about optimism. Keeping your head up isn't a bad way to go about life, so long as it isn't treated as a prescriptive means to success. Moore's study is hardly the first to find holes in a dogmatic equipment of the outlook. A 2007 study found that optimism, when practiced in extremes, is associated with financial impulsiveness and other unwise behavior. A much older but equally telling study from 1991 found similar hindrances for people trying to lose weight: the more positively women felt about the future, the fewer pounds they managed to shed.

Pessimism, to be clear, doesn't tend to produce better outcomes either. Previous research has shown that defensive pessimism, where people protect themselves from the worst case scenario, has, unsurprisingly, left them better protected when those scenarios unfold. But this latest study did not find that pessimists performed any better.

Moore, based on both his research and his real life observations, favors more of a middle ground, where one's expectations are as closely aligned with reality as possible.

"Early on in my career, I was quite sure that there were instances where being optimistic helps you perform better," he said. "Now I'm pretty sure that the true value is in realism."