The 'Future Is Now' Bias: Anchoring and (Insufficient) Adjustment When Predicting the Future from the Present

57 Pages Posted: 27 Jun 2019

See all articles by Julian Givi

Julian Givi

West Virginia University

Jeff Galak

Carnegie Mellon University

Date Written: June 24, 2019

Abstract

In the present research, we document a novel forecasting bias, which we term the “future is now” (FIN) bias. Specifically, we show that people tend to believe that the future will mirror the present, even when such a belief is unfounded. That is, people overestimate the chances that whatever is happening now, will happen in the future, even when the (known) explicit probabilities of future outcomes contradict such a belief. This appears to be driven by an anchoring and (insufficient) adjustment process, whereby initial beliefs about the future are heavily influenced by the present circumstances, and then subsequent beliefs are not sufficiently adjusted once the probabilities of future outcomes are learned. Across nine studies (employing over 3,800 participants), we demonstrate the FIN bias in a variety of forecasting contexts, show that it manifests in incentive compatible settings, and provide evidence in support of an anchoring and (insufficient) adjustment mechanistic account.

Keywords: anchoring and adjustment, status-quo, forecasting, prediction, beliefs, heuristics

Suggested Citation

Givi, Julian and Galak, Jeff, The 'Future Is Now' Bias: Anchoring and (Insufficient) Adjustment When Predicting the Future from the Present (June 24, 2019). Available at SSRN: https://ssrn.com/abstract=3409506 or http://dx.doi.org/10.2139/ssrn.3409506

Julian Givi (Contact Author)

West Virginia University ( email )

John Chambers College of Business and Economics
West Virginia University
Morgantown, WV 26506
United States

Jeff Galak

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States
412-268-5810 (Phone)

HOME PAGE: http://www.jeffgalak.com

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