Failures in Forecasting: An Experiment on Interpersonal Projection Bias

Abstract

Using a real-effort experiment, we show that people project their current tastes onto others, even when others’ tastes are exogenously manipulated and transparently different. In a first stage, “workers” stated their willingness to continue working on a tedious task. We varied how many initial tasks workers completed before eliciting their willingness to work (WTW); some were relatively fresh when stating their WTW, while others were relatively tired. Later, a separate group of “predictors”—who also worked on the task—guessed the WTW of workers in each state. We find (i) tired workers were less willing to work than fresh workers; (ii) predictors (in aggregate) accurately forecasted the WTW of workers when they cast their predictions in the same state as the workers about whom they were predicting, but, (iii) when predictors were fresh but guessing about tired workers, they substantially overestimated the WTW of tired workers, and (iv) when predictors were tired but guessing about fresh workers, they underestimated the WTW of fresh workers. Using an additional treatment, we find that workers also mispredicted their own future WTW, and we compare the magnitudes of intra- and interpersonal projection bias.