Why don't we learn from poor choices? The consistency of expectation, choice, and memory clouds the lessons of experience
✍ Scribed by Norbert Schwarz; Jing Xu
- Publisher
- Elsevier Science
- Year
- 2011
- Tongue
- English
- Weight
- 150 KB
- Volume
- 21
- Category
- Article
- ISSN
- 1057-7408
No coin nor oath required. For personal study only.
✦ Synopsis
Abstract
Why do consumers need advice on how to spend their money to improve their enjoyment of life? Why don't they learn this from daily experience? We propose that consumers' opportunity to learn from experience is impaired because hedonic experiences are fleeting. Once some time has passed, consumers rely on their general knowledge to reconstruct what the experience must have been, which is also the knowledge they use in hedonic prediction and choice. Given this overlap in inputs, prediction, choice and memory usually converge, leaving consumers with the impression that their predictions were correct and their choices wise. The actual in situ experience, however, may have been quite different. We illustrate these dynamics with a product many consumers want to spend their money on, namely, a luxury car.