Be optimistic or be cautious? Affective forecasting bias in allocation decisions and its effect

Abstract

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IntroductionPeople’s forecasts of their future emotions play an essential role in their behavior and experience of well-being. However, their emotional reactions may fall short of what they expect, which has implications for subsequent decision making. The current paper investigated the accuracy of affective forecasting about resource allocations and how this (in)accuracy predicts future allocation decisions.MethodsTwo experimental studies were conducted. Study 1 (N = 84) examined the extent to which people can accurately predict how allocation decisions will feel using an ultimatum game on the part of the allocator. Study 2 tested whether the affective forecasting bias affects future allocation decisions, with 192 participants playing a two-round ultimatum game on the part of allocators.ResultsStudy 1 found an affective forecasting bias, and people anticipated more powerful emotional reactions to both positive and negative allocation events than they actually experienced when the events occurred. Study 2 found that increased affective forecasting bias resulted in less generous decisions in positive event conditions and more generous decisions in negative event conditions.DiscussionThese results extend previous findings concerning affective forecasting bias and the feelings-as-information model in resource allocation interactions and show that the difference between anticipated and experienced emotion is also informative in allocation decisions. The results suggest that being more cautious when forecasting positive outcomes and more optimistic when forecasting negative outcomes can be beneficial to one’s well-being.

Keywords

• affective forecasting
• affective forecasting bias
• allocation decisions
• ultimatum game
• generosity
• well-being