Feelings, Forecasts, and the Impact on Our Decisions

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How often do you anticipate a holiday or the latest tech gadget only to feel grossly underwhelmed after it arrives and the excitement wears off?

Perhaps you know divorcing couples who anticipated wanton relief and teenage liberation, only to find themselves engulfed in post-separation loneliness and regret?

I know some who count down to retirement, envisioning endless leisure time and lie-ins. Yet when it comes, boredom and lost identity dash the dream.

These instances offer glimpses into our inability to accurately predict our future emotional states. We overestimate the gain and underestimate the loss. We overestimate the positive aspects while neglecting potential drawbacks. we underestimate the long-term impact, focusing on short-term relief.

This phenomenon isn't limited to consumer choice or relationships; it extends to career decisions, gambling ventures, medical treatment, risk assessments, and social preferences.

Ultimately, we make decisions about tomorrow based on how we feel today. When I worked in the city, I always offered to dial into supposedly important conference calls scheduled during my holidays. It made sense at the time but it was a judgment error. My enthusiasm evaporated the minute I hit the beach. My husband says I do the same thing when I suggest having a house party. Great idea at the time but we can regret the offer.

Psychologists Julie Woodzicka and Marianne LaFrance studied how people react differently in the moment from how they predict they will, testing speaking up against offensive comments. We often think we would be wittier, smarter, or more vocal in certain circumstances. Yet we aren’t. This makes us more judgmental.

Interestingly, the same miscalculation occurs with positive events. You might anticipate a Taylor Swift concert, exotic honeymoon, or a coffee break. However, we get it wrong: Things are never as good or as bad as we expect.

So why do we frequently miss the mark? Why are the smartest people so bad at forecasting every emotion from anger to envy, shame, pride and regret? Emotional influences shape what’s often called affective forecasting error.

Factors Contributing to Affective Forecasting Error

Four factors explain this phenomenon:

1. Projection bias. This involves projecting current preferences, attitudes, or emotional states onto their future selves or onto others. This often leads to disillusionment when desires change over time. You may think you want to be CEO so you make sacrifices and miss too many kids' soccer practices. You finally get anointed only to realize the crown is not as rewarding as expected. Preferences change, like musical or culinary tastes—and in some cases, partners.
2. The expectation effect. We struggle to imagine any emotion that contradicts our current state, leading to a miscalibration of expectations. It’s hard to imagine outrage when we're relaxed or to imagine financial security when we're struggling to pay bills. During COVID-19, few could imagine the frustration of lockdown before it started.
3. Impact bias. We tend to overestimate the severity, intensity, or duration of a future emotional event. For instance, most people dread public speaking or meeting the in-laws. They might forecast instant rejection or verbal slip-ups. It’s unrealistic, as the worst-case scenario rarely happens. Equally, you might think winning the lottery will bring everlasting happiness.
4. The adaptation effect. We expect to feel grief or sadness longer than we do. However, in reality, people tend to return to a relatively stable level of satisfaction after significant positive or negative events. They adapt. This is also referred to as the hedonic treadmill.

As the Stoic philosopher Seneca said, “We suffer more in imagination than in reality.”

In business, mispredicting future emotions such as guilt, regret or shame can more easily lead to scandalous misconduct. Consider the appalling British Post Office scandal where investigators relied on faulty assumptions about the veracity of accounting systems. Some assumed they’d always feel disgust at alleged wrongdoing. Yet in time, they were wrong - did regret and shame at their rush to judgment and conviction of the innocent replace misplaced disgust?

Predicting emotions accurately is challenging at any time but especially in today's noisy world. Without greater awareness of this phenomenon, many health, financial, and purchasing decisions are at risk. If we think we’re accurately judging our future spending patterns, we easily overestimate or underestimate.

It’s hard to spot this hidden error in others and ourselves which makes this a dangerous derailer. As I write in my book, Tune In: How to Make Smarter Decisions in a Noisy World, because we’re awful at predicting how we’ll feel next week, it’s more important than ever not to tune out and recognize this. We easily can be more empowered than enfeebled by the unconscious. We simply need to be more conscious of unconscious risk.

Affective Forecasting Essential Reads

Affective Forecasting: How It Affects Our Health

Why You Can’t Imagine How You’ll Feel in the Future

How to Mitigate Emotional Forecasting Error

Several behaviorally informed strategies are possible:

1. Reflective Practice: Reflect on past experiences where emotional forecasts were inaccurate. You thought you would be happier or more miserable before an event occurred but you weren’t. This might be an exam, new job, or new house. By recognizing these instances, mindfulness promotes more present-moment awareness.
2. Perspective Taking: By adopting different perspectives and considering how others might feel in similar situations can reduce egotistical bias. Some tools assist predictions such as matrices, emotion mapping, or scenario planning. Relying on objective evidence over subjective intuition also improves forecasting accuracy.
3. Counterfactual Thinking: Imagine alternative outcomes for nuanced interpretations of topics like religious or political beliefs. What if Joe Biden was younger? What if divorce isn’t the answer? What if you’re unhappier in retirement? Considering "what-if" scenarios help identify factors that may influence varying degrees of the emotion, e.g., hope or fear.
4. Temporal Discounting: What you want now may not be the same later. Income expectations modify during our life cycle, yet we overweight what matters today. Think spendy millennials, fast drivers, or lifetime smokers. Short-termism typically dominates decisions. Understanding temporal discounting isn’t as complex as it sounds.

Incorporating these strategies into decision-making can enhance your ability to better predict future emotions and make more informed choices, leading to more fulfilling outcomes—whether in career, relationships, or life's milestones. When we know better, we do better. The smart individual knows that embracing the future rather than fearing it allows for greater self-awareness and improved judgment. This matters in a complex, noisy world. Now you can imagine it.