Budget overestimation when dealing with an uncertainty goal

Abstract

We conducted 2 studies (N = 86 and 248) to examine people's tendency to overestimate their personal budget. The findings support 3 hypotheses. First, about 35% of participants in our first study tended to overestimate their budget when dealing with an uncertainty goal. Second, we found that focalism played a mediating role in this relationship. Third, in our second study we found that temporal distance positively moderated this relationship: The distant future strengthened the effect of dealing with an uncertainty goal on budget overestimation, whereas the near future attenuated it. These findings shed light on the cause and internal mechanism of consumer budget overestimation. Theoretical and practical implications are also discussed.