Certainty and overconfidence in future preferences for food

Forskningsoutput: TidskriftsbidragArtikel i vetenskaplig tidskrift

Abstract

We examine consumer certainty of future preferences and overconfidence in predicting future preferences. We explore how preference certainty and overconfidence impact the option value to revise today's decisions in the future. We design a laboratory experiment that creates a controlled choice environment, in which a subject's choice set (over food snacks) is known and constant over time, and the time frame is short - subjects make choices for themselves today, and for one to two weeks ahead. Our results suggest that even for such a seemingly straightforward choice task, only 45% of subjects can predict future choices accurately, while stated certainty of future preferences (one and two weeks ahead) is around 80%. We define overconfidence in predicting future preferences as: the difference between actual accuracy at predicting future choices and stated certainty of future preferences. Our results suggest strong evidence of overconfidence. We find that overconfidence increases with the level of stated certainty of future preferences. Finally, we observe that the option value people attach to future choice flexibility decreases with overconfidence. Overconfidence in future preferences affects economic welfare because it says people have too much incentive to lock themselves into future suboptimal decisions. Published by Elsevier B.V.

Detaljer

Författare
Enheter & grupper
Externa organisationer
  • University of Copenhagen
Forskningsområden

Ämnesklassifikation (UKÄ) – OBLIGATORISK

  • Tillämpad psykologi

Nyckelord

Originalspråkengelska
Sidor (från-till)101-113
TidskriftJournal of Economic Psychology
Volym51
StatusPublished - 2015
PublikationskategoriForskning
Peer review utfördJa

Relaterad forskningsoutput

Thunström, L., Jonas Nordström & Shogren, J., 2015, Department of Food and Resource Economics, University of Copenhagen, 28 s. (IFRO Working Paper; nr. 4).

Forskningsoutput: Working paper

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