Consuming experience: Why affective forecasters overestimate comparative value

In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: a b s t r a c t a r t i c l e i n f o The hedonic value of an outcome can be influenced by the alternatives to which it is compared, which is why people expect to be happier with outcomes that maximize comparative value (e.g., the best of several mediocre alternatives) than with outcomes that maximize absolute value (e.g., the worst of several excellent alternatives). The results of five experiments suggest that affective forecasters overestimate the importance of comparative value because forecasters do not realize that comparison requires cognitive resources, and that experiences consume more cognitive resources than do forecasts. In other words, because forecasters overestimate the extent to which they will be able to think about what they did not get while experiencing what they got. Psychologists and economists have long believed that a person's satisfaction with an outcome can be influenced by the alternatives to which that outcome is compared. " Our wants and pleasures… are of a relative nature " wrote Karl Marx (1849/2004), who noted that a homeowner will enjoy his little house until his neighbor builds a larger one, at which time " the little house shrinks to a hut… (and) the occupant of the relatively little house will always find himself more uncomfortable, more dissatisfied, more cramped within his four walls. support the notion that an outcome's hedonic value can be influenced by the alternatives to which it is compared. Ordinary people seem to share this intuition, which is why they often trade absolute value for: When people are given a choice between an outcome that is comparatively superior but absolutely inferior (e.g., a job that pays them $45,000 and pays everyone else $40,000) and an outcome that is absolutely superior but comparatively inferior (e.g., a job that pays them $50,000 and pays everyone else $55,000), a sizeable number choose the former (Solnick & Hemenway, 1998), and those who do not typically predict that they would be happier if they did (Tversky & Griffin, 1991). Because people expect to compare their salary to its alternatives, they willingly trade the pleasure they would derive from extra income for the …