It is important to be able to make judgments about how
likely it is for events to happen, because that influences many long-term
decisions. When you buy a car, for
example, the sales staff wants to sell you an additional extended
warranty. This warranty covers damage to
the car that may occur several years after you purchase the car. The decision about whether to buy the
insurance depends on your judgment about how likely the car is to break down in
the future.
One factor that affects your judgments about these future
events is how specifically you think about them. However, the influences of being specific are
complicated.
Sometimes, thinking specifically about things will make you
think the events are more likely than thinking about them abstractly. This happens when it is easier to think about
an example of a specific event than an abstract one. It may be difficult to think about a car
breaking down, but a few specific examples might make it easier to remember
similar situations that happened to you or a friend in the past.
In this case, someone selling you an extended warranty would
do well to remind you about the many things that can go wrong with a car as it
gets older. As you hear about worn
belts, slipping transmissions, and broken ball joints will make you remember
other times this has happened. In this
case, specific thinking makes you feel that an event is more likely, and so you
are more likely to purchase insurance.
This idea is consistent with a number of studies done by Derek Koehler,
Amos Tversky, and their colleagues.
At other times, thinking specifically can actually make a
set of outcomes harder to think about.
This possibility was explored in a paper in the May, 2011 issue of the Journal of Experimental Psychology: General
by Joseph Redden and Shane Frederick.
They pointed out that sometimes thinking specifically requires keeping
track of many different possible outcomes.
In this case, it may feel harder to think about the specific cases than
about the general one. When that happens,
your belief that the specific events will happen may actually go down.
In one study, they had people judge whether they were
interested in playing a number of bets on an upcoming Dallas Cowboys football
game. Participants also made judgments about many other bets unrelated to the
game. In each case, participants had the choice between receiving $15 for
certain or receiving $35 if a particular outcome occurred. Some outcomes were fairly general. The participants rated how interested they
were in gambling that Dallas would kick a field goal some time during the
game. They also rated how interested
they were in gambling that the opposing team would kick a field goal some time
during the game. In each case, people
were reasonably interested in the bet and thought that there was about a 65%
chance they would win.
Other outcomes were specific, though together they were
equivalent to the general bets. For
example, one involved betting that Dallas would kick a field goal in the first
half OR the opponent would kick a field goal in the second half. The second involved betting that the opponent
would kick a field goal in the first half OR Dallas would kick a field goal in
the second half.
If you think that there is about a 65% chance that each team
will kick a field goal some time during the game, then across these two other
bets, you ought to think that there is about a 65% chance that you will win the
more specific bets as well. Yet people
were much less interested in playing these specific bets and overall judged
that there was only a 53% chance that they would win these bets.
These specific bets are more difficult to think about than
the general ones. You have to focus just
on the first half for one team and just the second half for the other team. This increase in difficulty makes the bets
seem less attractive.
What binds these examples together is the importance of ease
of thinking in evaluating the future. If
an abstract event does not call much to mind, but a specific event does call
past events to mind, then you tend to judge the specific event as more likely
than the abstract one. If a specific
event has lots of sub-events that are difficult to track, then the specific
event is seen as less likely than the general one.
So, the next time you are deciding whether to buy insurance,
don’t rely on your gut feelings. Try to
get some actual data about how likely it is that a bad event will happen and
compare that probability against the price.
For these kinds of long-term decisions, your feeling about the choice is
not a reliable indicator of the actual chances that a bad outcome will occur.
