Overestimating the Valuations of Others: People Believe that Others Have More Intense Experiences

119 Pages Posted: 6 Apr 2019 Last revised: 19 Jul 2019

See all articles by Minah Jung

Minah Jung

New York University (NYU) - Department of Marketing

Alice Moon

The Wharton School

Leif D. Nelson

University of California, Berkeley - Haas School of Business

Date Written: February 4, 2019

Abstract

People often make judgments about their own and others’ valuations and preferences. Across 13
studies (N=19,391), we find a robust bias in these judgments such that people tend to believe that
others have more intense experiences than they do themselves, leading to overestimation of
others’ valuations and preferences. We argue that this overestimation arises because estimations
of others’ preferences rely on people’s intuitive, core representations of the experience itself (i.e.,
whether the experience is positive or negative). We first demonstrate that the overestimation bias
is pervasive for a wide range of positive (Studies 1-5) and negative experiences (Study 6).
Furthermore, the bias is not merely an artifact of how preferences are measured (Study 7).
Consistent with judgments based on core representations, the bias significantly reduces when the
core representation is uniformly-valenced (Studies 8A-8B). This overestimation bias ultimately
forms a paradox in how people think that others trade off between valuation and utility (Studies
9A-9C). Specifically, people believe that an identically-paying other would enjoy the same
experience more than they would, but also that an identically-enjoying other would pay more for
the same experience. Finally, consistent with a core representation explanation, explicitly
prompting people to consider the entire distribution of others’ preferences significantly reduced
or eliminated the bias (Study 10). These findings suggest that social judgments of others’
preferences are not only largely biased, but they also ignore how others make tradeoffs between
evaluative metrics.

Keywords: overestimation bias, comparative judgments, valuation, preferences, paradox

Suggested Citation

Jung, Minah and Moon, Alice and Nelson, Leif D., Overestimating the Valuations of Others: People Believe that Others Have More Intense Experiences (February 4, 2019). Available at SSRN: https://ssrn.com/abstract=3352888 or http://dx.doi.org/10.2139/ssrn.3352888

Minah Jung

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Alice Moon (Contact Author)

The Wharton School ( email )

Jon M. Huntsman Hall
3730 Walnut St
Philadelphia, PA 19104
United States

Leif D. Nelson

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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