Lay Rationalism and Inconsistency between Predicted Experience and Decision

Abstract

Decision-makers are sometimes depicted as impulsive and overly influenced by hot,affective factors. The present research suggests that decision-makers may be too cold and overly focus on rationalistic attributes, such as economic values, quantitative specifications,and functions. In support of this proposition, we find a systematic inconsistency between predicted experience and decision. That is, people are more likely to favor a rationalistically-superior option when they make a decision than when they predict experience. We discuss how this work contributes to research on predicted and decision utilities; we also discuss when decision-makers overweight hot factors and when they overweight cold factors.

Keywords: experienced utility, lay rationalism, rationality, experienced utility, affective forecasting, happiness

JEL Classification: D81, D11, D12, D91