“Lottery Loser!” A term so common we’ve heard it on the formerly popular TV show “House.” A lottery loser is someone who wins a great deal of money only to end up miserable and financially worse off than before winning the money.
But, wait, this can’t be! While we know that money doesn’t buy happiness, we also know that it offers choices. With money in hand, we can take the trip to Hawaii, go on that luxury cruise, and buy our in-laws a mansion on another continent. It’s all good, right?
Sadly, no. The lottery loser highlights the difficulty of accurately predicting the future. What’s going on here?
Because we know our likes and dislikes, we understandably believe that we can easily identify what will make us happy. The reality is more subtle. While most of us do, in fact, know what we like and dislike we are, as a rule, terrible fortune tellers. We simply don’t understand what is likely to make us happy over the long run.
The reason behind our less than stellar predictions is our susceptibility to the focalism bias. When looking toward the future we tend to focus on a single event, such as winning the lottery, “If only I had money, I’d be happy,” we say to ourselves. We think about beaches and cruises but overlook the likelihood of family feuds and people of all stripes hassling us for money.
Equally problematic is the tendency to engage in the endurance bias. We presume that the way we feel now will last forever. This bias applies to positive and negative feelings. We assume that the euphoria of winning the lottery or the profound grief of losing a loved one will last forever. They won’t. We are remarkably resilient and tend to return to a happiness set point.
The point is that the focalism and endurance biases pose serious challenges to predicting our own behavior. In other words, these biases illustrate the power of imagination to distort reality by adding information to a future scenario that is often inaccurate and misleading. Referring to imagination, Harvard psychologist Daniel Gilbert describes “its failure to recognize that things will look different once they happen—in particular that bad things will look a whole lot better.”*
The solution is to eschew imagination in favor of investigation. If we are seriously considering a job in Hawaii, we should make a concerted effort to find someone currently living in Hawaii who used to live in our state or region, preferably in a situation similar to our current circumstances.
Beware cognitive biases such as focalism and endurance. Ignoring these unconscious but powerful forces could have you Hawaii-bound when Topeka is the better choice.
*Stumbling on Happiness (page 250) by Daniel Gilbert.