Benefits and costs to the individual  

See also:  Depressive realism 

In 1988 Taylor and Brown have argued that positive illusions, including the
illusion of control, are adaptive as they motivate people to persist at tasks
when they might otherwise give up.  [4]  This position is supported by 
Albert Bandura  's claim in 1989 that
"optimistic self-appraisals of capability, that are not unduly disparate from
what is possible, can be advantageous, whereas  veridical  judgements can be self-limiting".  [29]  His argument is
essentially concerned with the adaptive effect of optimistic beliefs about
control and performance in circumstances where control is possible, rather
than perceived control in circumstances where outcomes do not depend on an
individual's behavior.

In 1997 Bandura also suggested that:

> "In activities where the margins of error are narrow and missteps can
> produce costly or injurious consequences, personal well-being is best served
> by highly accurate efficacy appraisal."  [30]

Taylor and Brown argue that positive illusions are  adaptive
 , since there is evidence that
they are more common in normally mentally healthy individuals than in
depressed individuals. However, in 1998 Pacini, Muir and Epstein showed that
this may be because depressed people overcompensate for a tendency toward
maladaptive intuitive processing by exercising excessive rational control in
trivial situations, and note that the difference with non-depressed people
disappears in more consequential circumstances.  [31]

There is also  empirical evidence  that high self-efficacy can be maladaptive in some circumstances.
In a scenario-based study, Whyte et al. showed in 1997 that participants in
whom they had induced high self-efficacy were significantly more likely to
escalate commitment to a failing course of action.  [32]  In 1998 Knee and
Zuckerman challenged the definition of mental health used by Taylor and Brown
and argue that lack of illusions is associated with a non-defensive
personality oriented towards growth and learning and with low ego involvement
in outcomes.  [33]  They present evidence that self-determined individuals are
less prone to these illusions.

In the late 1970s,  Abramson  and  Alloy  demonstrated that
depressed individuals held a more accurate view than their non-depressed
counterparts in a test which measured illusion of control.  [34]  This finding
held true even when the depression was manipulated experimentally. However,
when replicating the findings Msetfi et al. (2005, 2007) found that the
overestimation of control in nondepressed people only showed up when the
interval was long enough, implying that this is because they take more aspects
of a situation into account than their depressed counterparts.  [35]  [36]
Also, Dykman et al. (1989) showed that depressed people believe they have no
control in situations where they actually do, so their perception is not more
accurate overall.  [37]  Allan et al. (2007) has proposed that the pessimistic
bias of depressives resulted in "depressive realism" when asked about
estimation of control, because depressed individuals are more likely to say no
even if they have control.  [38]