Impact bias

Research shows that people often make errors about how much positive or negative effect an event will have on us. People mispredict their emotional reactions (how much pleasure or displeasure an event will bring them) when they mispredict how the event will occur. These mistaken projections can lead to mistaken assumptions about the impact of an event on their happiness. Generally, people accurately predict the valence, if an event will generate a positive or negative reaction, but people are less accurate in their predictions about the intensity and the duration of these effects.[4]

To make decisions, people try to predict how an event will play out and what it will make them feel. However, when making these predictions, people are subject to many cognitive biases, including the impact bias. Research shows that people’s projections are often mistaken (e.g. Wilson & Gilbert, 2005;[4] Buehler & McFarland, 2001;[3] Loewenstein & Schake, 1999). Early studies revealed that this phenomenon is a result of people’s inability to anticipate how their feelings will be affected by external factors, and change over time (e.g. Kahneman, 1994). People are more prone to make errors about intensity and duration of affect, than about valence. These mistaken projections affect people’s ability to make decisions that maximize their happiness.[4][2]

Misconstrual of future events: When predicting how an experience will impact us emotionally, events which have not been experienced are particularly difficult. Often what we think an event may be like does not relate to what the experience is like. People know that the future is uncertain, but fail to recognize their projections as construals, subjective perceptions or interpretations of reality. (Griffin & Ross, 1998; Wilson & Gilbert, 2003). Misconstruals can be responsible for a great range of mispredictions because there is no limit to the degree of error one can make. It leads to the impact bias when misconstruals are accurate about the valence of an event, but overpredict intensity and duration of emotional reaction.[4]

Inaccurate theories: People have created cultural theories and had experiences that greatly influence beliefs of how an event will affect us. For example, American culture has emphasized a correlation between wealth and happiness, however despite this belief; money does not necessarily bring happiness.[6]

Motivated Distortions: When faced with a negative event people may have forecasts that are overestimated and can evoke either comfort or fear in the present. The overestimation however can often be used to soften the effects of an event or make it easier by the reality not being as extreme as the forecasted impact.

Under correction (anchoring and adjustment): People anchor their prediction on how they currently feel and never accurately adjust their predictions. An illustrative example proposed by Wilson and Gilbert (2005), is that if you are currently in bed with a cold, and are invited to a party a month from now, it will be very difficult to separate your negative feelings from your prediction of how you will feel on a Saturday night a month later.[4] This process is sometimes referred to as the projection bias (Loewenstein et al.,1999) whereby people’s affective forecasts are unconsciously or consciously influenced by their current state.

Often when making a prediction of the impact of an event people focus solely on the event in question. This ignores the fact that with the passage of time, other events will occur that influence happiness. Disregarding the effect of unrelated events on future thoughts emotions, leads to erroneous predictions of our emotional reactions. Whereby, since we are focusing on the impact on one specific event, we simultaneously overestimate the intensity and duration of our emotional reaction to that event and underestimate the effect of other unrelated events. However, we fail to consider that these unrelated events can moderate our emotional responses.[4][7]

Cognitive bias whereby people focus too much on the differences between two future events instead of the shared features. This bias leads to the impact bias when people focus too much on a distinction that does affect their future happiness instead of focusing on features that do. As a result, people overestimate the impact of that difference on their wellbeing. For example, a study asked college students to predict how happy they would be a year later if assigned to a desired or undesired dormitory. Results showed that the students largely overestimated their unhappiness when assigned to an undesired dormitory, as their overall happiness was nearly identical to those living in desired houses the following year.[4][8]

People fail to recognize how quickly they will make sense of an event, thereby, failing to anticipate the deceleration of emotional reactions. Research suggests that there are four processes by which our psychological immune system deals with unpredicted and poorly understood events: First, they pay a lot of attention to the event, then, they react emotionally, they attempt to make sense of the event, and finally, they adapt emotionally. Failure to recognize that these processes will occur or how fast they will occur causes people to overestimate the impact (and the duration of impact) of such events.[4]

Immune Neglect: We have unconscious psychological processes such as ego defense, dissonance reductions, self-serving biases, etc. that will cushion the effects of a negative event. When making predictions, people are generally unaware of these unconscious processes, and fail to take them into account when making affective forecasts.