This is the reason negotiators start with a number that is deliberately too low or too high: They know that number will “anchor” the subsequent dealings. The anchoring effect is our tendency to rely too heavily on the first piece of information offered, particularly if that information is presented in numeric form, when making decisions, estimates, or predictions. (Images of plane crashes are more vivid and dramatic in our memory and imagination, and hence more available to our consciousness.) Availability bias makes us think that, say, traveling by plane is more dangerous than traveling by car. Optimism bias leads us to consistently underestimate the costs and the duration of basically every project we undertake. The gambler’s fallacy makes us absolutely certain that, if a coin has landed heads up five times in a row, it’s more likely to land tails up the sixth time. But a solid group of 100 or so biases has been repeatedly shown to exist, and can make a hash of our lives. The ikea effect, for instance, is defined as “the tendency for people to place a disproportionately high value on objects that they partially assembled themselves.” And others closely resemble one another to the point of redundancy. Wikipedia’s “ List of cognitive biases” contains 185 entries, from actor-observer bias (“the tendency for explanations of other individuals’ behaviors to overemphasize the influence of their personality and underemphasize the influence of their situation … and for explanations of one’s own behaviors to do the opposite”) to the Zeigarnik effect (“uncompleted or interrupted tasks are remembered better than completed ones”). Present bias, by contrast, is an example of cognitive bias-the collection of faulty ways of thinking that is apparently hardwired into the human brain. When people hear the word bias, many if not most will think of either racial prejudice or news organizations that slant their coverage to favor one political position over another. What this did, he explained, was make me ask myself, How will I feel toward the end of my life if my offspring are not taken care of? I am already old-in my early 60s, if you must know-so Hershfield furnished me not only with an image of myself in my 80s (complete with age spots, an exorbitantly asymmetrical face, and wrinkles as deep as a Manhattan pothole) but also with an image of my daughter as she’ll look decades from now. That’s more than double the amount that would have been invested by members of the control group, who were willing to sock away an average of only $80. The students who had looked their older self in the eye said they would put an average of $172 into a retirement account. Then they asked the students what they would do if they unexpectedly came into $1,000. They had the students observe, for a minute or so, virtual-reality avatars showing what they would look like at age 70. As a result, he explained in a 2011 paper, “saving is like a choice between spending money today or giving it to a stranger years from now.” The paper described an attempt by Hershfield and several colleagues to modify that state of mind in their students. Hershfield is a marketing professor at UCLA whose research starts from the idea that people are “estranged” from their future self. That state of affairs led a scholar named Hal Hershfield to play around with photographs. Especially in the United States, people egregiously undersave for retirement-even when they make enough money to not spend their whole paycheck on expenses, and even when they work for a company that will kick in additional funds to retirement plans when they contribute. Present bias shows up not just in experiments, of course, but in the real world. Asked whether they would take $150 a year from now or $180 in 13 months, people are overwhelmingly willing to wait an extra month for the extra $30. Giving up a 20 percent return on investment is a bad move-which is easy to recognize when the question is thrust away from the present. When asked whether they would prefer to have, say, $150 today or $180 in one month, people tend to choose the $150. To hear more feature stories, see our full list or get the Audm iPhone app.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |