Abstract
The aim of this study is to test whether projection bias exists in consumers’ purchasing decisions for food products. To achieve our aim, we used a non-hypothetical experiment (i.e., experimental auction), where hungry and non-hungry participants were incentivized to reveal their willingness to pay (WTP). The results confirm the existence of projection bias when consumers made their decisions on food products. In particular, projection bias existed because currently hungry participants were willing to pay a higher price premium for cheeses than satiated ones, both in hungry and satiated future states. Moreover, participants overvalued the food product more when they were delivered in the future hungry condition than in the satiated one. Our study provides clear, quantitative and meaningful evidence of projection bias because our findings are based on economic valuation of food preferences. Indeed, the strength of this study is that findings are expressed in terms of willingness to pay which is an interpretable amount of money.
Highlights
Empirical evidence on food choice has shown that consumers are subject to projection bias when making intertemporal decisions
In their seminal paper, [1] coined the term ‘projection bias’ to refer to a general bias which arises whenever preferences change over time, causing individuals to project their current state into the future incorrectly
Average bids in the third round are not statistically different from average bids in the second round. These results indicate that hungry participants learned and gained experience with the mechanism due to the learning effect
Summary
Empirical evidence on food choice has shown that consumers are subject to projection bias when making intertemporal decisions. In their seminal paper, [1] coined the term ‘projection bias’ to refer to a general bias which arises whenever preferences change over time, causing individuals to project their current state into the future incorrectly. When people predict future preferences, they understand the direction in which their preferences will change, but they tend to underestimate the degree to which their future preferences will resemble their current preferences [1]. Projection bias is well illustrated when hungry people overspend in the supermarket because they tend to think that their current hunger will endure into the future. After having eaten a meal, they realize that if their hunger had been satisfied when they were shopping in the supermarket, they would not have overspent on these items
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