The Misprediction of Satisfaction in Housing Lotteries
Abstract (via Dunn, Wilson, Gilbert)
People tend to overestimate the emotional consequences of future life events, exhibiting an impact bias. The authors replicated the impact bias in a real-life context in which undergraduates were randomly assigned to dormitories (or “houses”). Participants appeared to focus on the wrong factors when imagining their future happiness in the houses. They placed far greater weight on highly variable physical features than on less variable social features in predicting their future happiness in each house, despite accurately recognizing that social features were more important than physical features when asked explicitly about the determinants of happiness. In Experiment 2, we found that this discrepancy emerged in part because participants exhibited an isolation effect, focusing too much on factors that distinguished between houses and not enough on factors that varied only slightly, such as social features.
Introduction (Via Dunn, Wilson, Giblert)
It is safe to say that chocolate cake, sunny spring days, and true love are more likely to produce happiness than are mud pies, freezing rain, and bad breakups. Yet, even if people accurately recognize what factors will lead to happiness, they may fail to apply this knowledge in imagining how they will feel in the future. For example, consider the case of a high school senior touring two universities that differ greatly in terms of setting (urban vs. rural), size, and gender ratios but are very similar in terms of dorm life, available extracurriculars, and opportunities for contact with professors. In predicting how happy he or she would be at each university, the rational student should weight the quality of each aspect (e.g., availability of extracurriculars) by its importance to his or her happiness. Yet, we would argue that the student may inadvertently place undue weight on those factors that vary a great deal across universities while placing little or no weight on important factors that vary less across options in imagining his or her future well-being at each school.
This prediction follows from Tversky’s (1972) elimination- by-aspects theory of choice. According to the theory, people simplify choices between options by canceling out and disregarding features that are shared across options, a tendency Kahneman and Tversky (1979) term the “isolation effect” (see also Houston & Sherman, 1995; Houston, Sherman, & Baker, 1991). Applying this theory, Hodges (1997) asked participants to choose between three apartments, including two that shared several very positive features but also had unique negative features, as well as one that had a unique set of positive and negative features. Although the two apartments with shared features were more attractive, on balance, than the third apartment, participants exhibited a preference for the latter because they cancelled out the positive, shared features of the first two apartments, paying attention primarily to the unique, negative features.
Our research suggests that individuals may sometimes err by placing excessive weight on highly variable features and inadequate weight on less variablefe atures in imagining thee motional consequences of competing options. A similar bias may emerge when policy makers envision options meant to increase the well-being of their constituents. For example, in the “slum clearance” projects of the 1950s and 1960s, urban planners chose to tear down small, dilapidated tenement buildings, constructing massive towers in their place. Policy makers apparently focused on the drastic improvement in physical features that this change would provide and overlooked the ramifications for social life of ripping up small, tightly knit tenement communities to create giant, anonymous collections of tower dwellers (Ross & Nisbett, 1991). Thus, individuals and policy makers alike may go astray if, as in our studies, they focus on alternatives that vary a great deal on features (e.g., physical aspects of tenements vs. high-rise apartments) that will be relatively inconsequential for people’s well-being.