The price of a happy ending can be bad decision-making, say researchers

Research using gambling techniques shows that even very recent experiences carry a ‘temporal markdown’ so that those more immediate carry disproportionate weight in decision-making, meaning that a ‘happy ending’ can wildly skew what we think we should do next over what experience would tell us.

 

A minority were able to maintain a seemingly perfect ability - at least within the parameters of the experiment - to see time on an equal footing.
   -  Martin Vestergaard

New research using high-speed gambling experiments shows that, for most of us, the last experience we’ve had can be the defining one when it comes to taking a decision, coming at the expense of other experiences we’ve accumulated further back in time.

The study, published today in the journal Proceedings of the Royal Society B, supports the idea that the ‘banker’s fallacy’ - focusing on immediate growth at the expense of longer-term stability that would produce better results - is intuitive in the way many of us make quick decisions.

People's natural inclination towards a ‘happy ending’ means that we often ascribe greater value to experiences than they are worth, say researchers, meaning that we end up overvaluing experiences with a final uptick over those that taper at the last minute, despite being of equal or even lesser overall value, and making our next moves on that basis.   

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Image: Ponder
Credit: AleXander Agopian


Reproduced courtesy of the University of Cambridge

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