The effects of hunger state on interpersonal projection bias

• Main Authors: Chua, Ivan Yi Wang, Teo, Alvin Jun Wen
• Other Authors: Yan Jubo
• Format: Final Year Project
• Language: English
• Published: Nanyang Technological University 2021
• Subjects: Social sciences::Economic development
• Online Access: https://hdl.handle.net/10356/147946
• Institution: Nanyang Technological University

Behavioural economists suggest that states such as hunger, thirst and sexual desire can have a powerful influence on people’s economic decisions for themselves and others. However, they failed to recognise such influences. Hence, when they do not account for their own hunger state in making their daily life decisions, it can easily result in sub-optimal outcomes and economic inefficiencies. Therefore, our research studies the effects of hunger state on interpersonal projection bias. We conducted an iterative Multiple Price List (iMPL) laboratory experiment on 101 subjects who were randomly assigned into full and hungry treatment groups. We varied the hunger state of the subjects before eliciting their willingness to pay (WTP); some were relatively hungry when they casted their own WTP while others were relatively full. Then, subjects predicted the WTP of a randomly assigned participant without knowing his/her actual satiety level, thus forming our basis to measure interpersonal projection bias. Lastly, we provided subjects with the actual satiety level of the randomly assigned participant whom they casted their WTP predictions for earlier on, and asked subjects to cast their WTP predictions again. Our experimental primarily focused on eliciting subjects’ WTP for consumables and non-consumables. For consumables, we found that: (i) hungry individuals have a higher average WTP than full individuals; (ii) hungry individuals overestimated the average WTP of full individuals; but (iii) full individuals underestimated the average WTP of hungry individuals; and iv) when additional information on the actual satiety level of the randomly assigned participant was provided to subjects, the magnitude of interpersonal projection bias was reduced. For non-consumables, we did not find any significance between the average WTP of the 2 treatment groups. Therefore, our study provided evidence that hunger state causes interpersonal projection bias for consumables.