Projection bias

We forecast our current preference on to a future event. Caused by mental contamination. Eg. If a student gets bad marks and is sad they think they are not going to enjoy a party two weeks in the future.

Cause

Projection bias can arise from empathy gaps, which occur when the present and future phases of affective forecasting(prediction of one's emotional state) are characterized by different states of physiological arousal, which the forecaster fails to take into account. For example, forecasters in a state of hunger are likely to overestimate how much they will want to eat later.

Consequences

• When buying food, people often wrongly project what they will want to eat in the future when they go shopping, which results in food waste.
• Projection bias influences the life-cycle of consumption. The immediate utility obtained from consuming particular goods exceeds the utility of future consumption. Consequently, projection bias causes a person to (plan to) consume too much early in life and too little late in life relative to what would be optimal