This is the third part in a four part series on decision-making traps common to both love and money.
The third bias I’d like to discuss is “Prince Charming Bias” or a hope for a high-impact, low probability event that will make all of your problems – romantic or financial, go away.
Let’s consider the way this gets drilled into us as a romantic ideal by taking a look at some popular characters from books and movies. Prince Phillip fights a dragon and storms a castle, all to get his love to wake up. Cinderella’s prince, after one hot night on the dance floor, scours the kingdom until he is able to rescue her from a life of servitude. And finally, Snow White’s man rescues her an evil hag, not to mention a bunch of short guys with one-dimensional personalities.
But I want you to notice something here – Why did I not refer to Snow White or Cinderalla’s rescuers by name? They don’t have a name – they are referred to and treated as abstractions! They are Prince Charming, that’s it. We care less about the person than the idea that there is someone out there waiting to swoop in and make it all better.
Hoping to be rescued isn’t just a romantic notion, it’s one we play out with our finances as well. The recent Mega Millions jackpot sold 1.5 billion tickets in the week run up to the grand prize drawing. That’s roughly 4.5 tickets for every man, woman and child in America.
This all seems harmless enough, until you consider that the Prince Charming Bias disproportionately impacts those who can least afford it. For example, per capita lottery sales are highest in NC’s poorest counties. Those who make less than $40,000 account for 28 percent of the population but make up 54 percent of lottery players. Lottery play is also inversely related to educational attainment – manual laborers with less than a HS diploma are most likely to play and those with advanced degrees are least likely. Imitating the fairy tales of our youth, we are a nation waiting on a cure all – in love as in money.
Lest you think me an arbitrary detractor of wishing on a star, let’s consider the probability of a white knight parking his horse in your driveway. You are 24 x as likely to be put to death by your state as win Mega Millions and 3 x as likely to be on death row and receive a last minute pardon. You are 9 x as likely to be crushed to death by a TV BUT if I asked you to bet on any of the aforementioned calamities, you would laugh at me. If we were rational economic decision makers, we’d similarly laugh if asked to gamble away our hard earned funds.
But what about those times when we are swooped up by our prince? What then? Well, 32% of winners gained a significant amount of weight, 43% reported no impact on their happiness and 44% were broke within five years. It seems that being rescued through no effort of our own is not all it’s cracked up to be! If someone were to do a sequel it might be titled, “Snow White: Fat, Sad and Broke.”