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Motivated Beliefs and Anticipation of Uncertainty Resolution†

Motivated Beliefs and Anticipation of Uncertainty Resolution† AbstractManipulating subjects’ expectations about the resolution of uncertainty, I show that subjects update beliefs about ego-relevant information optimistically when they expect no resolution of uncertainty but neutrally when they expect immediate uncertainty resolution. This finding highlights an important channel of the supply side of motivated beliefs and informs the discussion about the puzzling evidence on belief updating about ego-relevant information. Moreover, I document that subjects ex post rationalize information by manipulating their stated beliefs about the ego-relevance of the underlying event depending on the valence of information. This result suggests an additional channel that subjects use to protect their ego utility. (JEL D81, D83, D84) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review: Insights American Economic Association

Motivated Beliefs and Anticipation of Uncertainty Resolution†

Motivated Beliefs and Anticipation of Uncertainty Resolution†

American Economic Review: Insights , Volume 4 (1) – Mar 1, 2022

Abstract

AbstractManipulating subjects’ expectations about the resolution of uncertainty, I show that subjects update beliefs about ego-relevant information optimistically when they expect no resolution of uncertainty but neutrally when they expect immediate uncertainty resolution. This finding highlights an important channel of the supply side of motivated beliefs and informs the discussion about the puzzling evidence on belief updating about ego-relevant information. Moreover, I document that subjects ex post rationalize information by manipulating their stated beliefs about the ego-relevance of the underlying event depending on the valence of information. This result suggests an additional channel that subjects use to protect their ego utility. (JEL D81, D83, D84)

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Publisher
American Economic Association
Copyright
Copyright © 2022 © American Economic Association
ISSN
2640-205X
eISSN
2640-2068
DOI
10.1257/aeri.20200829
Publisher site
See Article on Publisher Site

Abstract

AbstractManipulating subjects’ expectations about the resolution of uncertainty, I show that subjects update beliefs about ego-relevant information optimistically when they expect no resolution of uncertainty but neutrally when they expect immediate uncertainty resolution. This finding highlights an important channel of the supply side of motivated beliefs and informs the discussion about the puzzling evidence on belief updating about ego-relevant information. Moreover, I document that subjects ex post rationalize information by manipulating their stated beliefs about the ego-relevance of the underlying event depending on the valence of information. This result suggests an additional channel that subjects use to protect their ego utility. (JEL D81, D83, D84)

Journal

American Economic Review: InsightsAmerican Economic Association

Published: Mar 1, 2022

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