Failures in Forecasting: An Experiment on Interpersonal Projection Bias

Benjamin Bushong () and Tristan Gagnon-Bartsch ()
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Benjamin Bushong: Michigan State University, East Lansing, Michigan 48824
Tristan Gagnon-Bartsch: Florida State University, Tallahassee, Florida 32306

Management Science, 2024, vol. 70, issue 12, 8735-8752

Abstract: Using a real-effort experiment, we show that people project their current tastes onto others when forecasting others’ behavior, even when their tastes are exogenously manipulated and transparently different. In the first part of our experiment, “workers” stated their willingness to continue working on a tedious task. We varied how many initial tasks workers completed before eliciting their willingness to work (WTW); some were relatively fresh when stating their WTW, whereas others were relatively tired. Later, a separate group of “predictors”—who also worked on the task—guessed the WTW of workers in each state. We find: (i) tired workers were less willing to work than fresh workers; (ii) predictors (in aggregate) accurately guessed the WTW of workers when they were in the same state as the workers about whom they were predicting; but (iii) when fresh predictors were guessing about tired workers, they substantially overestimated their WTW; and (iv) when tired predictors were guessing about fresh workers, they underestimated their WTW. Using an additional treatment, we find that workers also mispredicted their own future WTW, and we compare the magnitudes of intrapersonal and interpersonal projection bias.

Keywords: projection bias; real-effort experiments; forecasting; state-dependent preferences (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:12:p:8735-8752

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