Projection Bias

Projection Bias

Time for Reflection

When you look around at your possessions, are you able to identify items (gadgets, books, accessories, etc.) bought purely on instinct and not used since bought ? 

Recollect those discussion sessions, meetings, presentations, brainstorming when you assumed that all others involved in the process would align with your opinion, belief, thought process because of the idiosyncratic nature of your opinion !

Remember the time when you went on binge-shopping assuming you would need it all in future !

There are plenty of other similar scenarios such as our saving habits, fitness routine(exercising), getting-in/ moving-out of a relationship, where our future need get defined by our current needs and where we overestimated the normality of our belief/ opinion/ decision and expected others around to comply with it. These scenarios are very typical of a bias referred to as "Projection Bias". Let's explore this bias in more depth     

Definition and Background

"Projection Bias" is the tendency to project current preferences into the future as if future tastes will match current ones (Loewenstein, O'Donoghue, and Rabin 2003). The bias refers to our estimation of ourselves, where we tend to assume that our current tastes and preferences to continue in future too. We, somehow, underestimate the magnitude of change and believe that the way we think, feel and act now is the way we would do in future too. 

Projection Bias also refers to our tendency to overestimate the degree to which other people agree with us which could be in terms of the way we think or the way we work. 

So, Projection Bias refers to the following 2 aspects 

• Typicality or Normality of our behaviour when comparing with others
• Estimation of our future selves

The Projection Bias leads to the presence of "empathy gap", a situation where we tend to put our future selves in the same emotional state as our current self. This means that decisions related to our future are entirely based on out "emotional state" right now, in the present.

(An "empathy gap" is the inability to predict our behaviour from a calm and cool emotional state to a tempting hot emotional state)

The term "Projection Bias" was first introduced in the 2003 paper titled "Projection Bias in Predicting Future Utility" by Loewenstein, O'Donoghue and Rabin.

Why/ How does Projection Bias occur ?

The Project Bias occurs because of our current emotional state forming an "anchoring point" for our future emotional state. This implies that all decisions related to our future self are done with reference to this "anchoring point". The thoughts, feelings and behaviour of our future state are determined by

how/ what they are currently (in our current state).

Another reason for the bias to occur is because of our assumption that our beliefs, feelings and behaviours are accurate and appropriate and so shared by all, be it our future self or by people around us.    

According to Loewenstein and team, "Projection Bias" can happen when people make status-based decision that cause them to compare themselves to a different group of peers

Some of the triggers of Projection Bias are

• Hunger and Craving
• Overestimation of self, leading to Overconfidence
• Falling trap to impulsive buying

More about Projection Bias

Projection Bias is visible in many areas of our life such as 

• Car/ Vehicle Market 
• Housing Market
• Healthcare
• Financial Investment
• Consumerism
• Insurance

Just to elaborate on the above, there's a seasonal surge in the purchase of Cars and Houses. People tend to buy cars and houses, consistent with the weather conditions. In case of Healthcare, people tend to ignore opting for regular medical check-up if they are healthy currently. Another elaboration could be on Consumerism, where again people tend to go in for compulsive buying assuming the future weather conditions would remain consistent with how they are at present (currently). Likewise, similar examples exist for the other areas in the above list like Financial Investment and Insurance.

Projection Bias leads to many issue, some of which are

• focus only on short-term planning
• missing the big/ whole picture
• leading to obsessive behaviour
• insulated decision-making

The following are few methods/ techniques to mitigate the risks of Projection Bias

• Get rid of assumption and rely more on objectivity during decision-making
• Practice Visioning exercise to help clarify/ establish goals and destination  
• Mood Management, especially during decision-making to avoid irrational decision-making
• Practice Visualisation which helps provide details and insight into the future, ensuring that future is seen more from one's ambition and purpose in life than current situation. 
• Breaking the habit formation pattern for areas impacted by Projection Bias

Change is the only constant. Let our "Beliefs, Tastes and Preferences" embrace it (Change) too !