An example of optimism bias would be the interpretation of warnings, such as “Smoking kills”, to be meant for everybody but oneself. Positive facts; the mugging risk has decreased by 10% in your area; are more easily adopted than negative facts; you are now 10% more likely to be mugged. In application this may mean that we would be better off telling smokers something like, "Not smoking makes you better at sports".
20% of the population do not have this bias and a disproportionate amount of these people suffer from depression. Holding a more realistic view of a particular outcome has been shown to have a negative effect on the psyche and it is believed that an unrealistic optimism is adaptive for our health and lifespan. As would be expected in this adaptive model the bias is seen to fall away in stressful environments and we become more realistic about the probable outcome (to our advantage).
The hippocampus is used in creating both memories and projections for the future. Memories are created with more constraints while the future can be exaggerated in a positive sense.