Distinction Bias

Summary of blog post

Distinction bias is a tendency to over-value the effect of small quantitative differences when comparing options.

Comparison mode

When making decisions, we are in comparison mode and are more sensitive to small differences between options.

We can evaluate qualitative differences in comparison mode.

We aren’t good at predicting how quantitative differences affect happiness. This leads to placing higher emphasis on inconsequential quantitative differences and picking an option that doesn’t actually maximize happiness.

Experience mode

When living out our decisions, we are in experience mode and there is nothing else to compare the experience to.

How to mitigate distinction bias

1. Don’t compare options side by side

Evaluate each choice individually and on their own merit.

2. Known “must-haves” before looking

Marketing will use distinction bias to trick customers into paying for things/features we don’t need.

Write down essential criteria before shopping and buy the cheapest thing that meets all criteria.

3. Optimize for things you can’t get used to

This paper (Economic consequences of mispredicting utility) suggests we fall victim to distinction bias when we underestimate our tendency to return to a baseline level of happiness over time, regardless of what good or bad things happen to us – hedonic adaptation.

Return to baseline has been shown to occur after marriage, voluntary job changes, promotions – things we expect to make us happier in the long run. We evolve to consider the new conditions as “normal” – stuck on a “satisfaction treadmill”.

Two tools for overcoming hedonic adaptation:

• variety
  • infrequent or uncertain positive events, ex. quality time with friends or a road trip
  • novel and unexpected experiences
  • ie. don’t get stuck in routine
• appreciation of positive experiences
  • focus, paying attention, savouring, gratitude