Details

Autor(en) / Beteiligte

• Loewenstein, George
• O'Donoghue, Ted
• Rabin, Matthew

Titel

Projection Bias in Predicting Future Utility

Ist Teil von

• The Quarterly journal of economics, 2003-11, Vol.118 (4), p.1209-1248

Ort / Verlag

Oxford: MIT Press

Erscheinungsjahr

2003

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• People exaggerate the degree to which their future tastes will resemble their current tastes. We present evidence from a variety of domains which demonstrates the prevalence of such projection bias, develop a formal model of it, and use this model to demonstrate its importance in economic environments. We show that, when people exhibit habit formation, projection bias leads people to consume too much early in life, and to decide, as time passes, to consume more-and save less-than originally planned. Projection bias can also lead to misguided purchases of durable goods. We discuss a number of additional applications and implications.