Undersum Bias

Abstract

People must rely on relatively intuitive processes to navigate complex information environments to make decisions. One common mental task is to keep a running total – that is, to form an estimate of the sum of positive-number series (e.g., mentally tracking expenses, calories). Despite the ubiquity of this behavior, relatively little is known about how the mind forms intuitive representations of numeric series. We find that decision-makers systematically underestimate the sums of series in both contextualized and uncontextualized judgments. This undersum bias occurs largely independent of limitations in working memory capacity and motivated cognitions, and likely results from a systematic error in the encoding of numeric series. We show that this tendency to underestimate series can lead to overspending and overconsumption, and discuss managerial implications of this phenomenon.

Keywords: numerical cognition, quantity perception, information integration, overconsumption, self-control