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Self-Serving Biases in Beliefs about Collective Outcomes

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  • Shimon Kogan
  • Florian H. Schneider
  • Roberto A. Weber

Abstract

Beliefs about collective outcomes, such as economic growth or firm profitability, play an important role in many contexts. We study biases in the formation of such beliefs. Specifically, we explore whether over-optimism and self-serving biases in information processing—documented for beliefs about individual outcomes—affect beliefs about collective outcomes. We find that people indeed exhibit self-serving biases for collective outcomes, and that such biases are similar to biases for individual outcomes. In addition, we investigate whether collective self-delusion is mitigated by market institutions. If anything, biases in information processing are more pronounced in the presence of a market.

Suggested Citation

  • Shimon Kogan & Florian H. Schneider & Roberto A. Weber, 2021. "Self-Serving Biases in Beliefs about Collective Outcomes," CESifo Working Paper Series 8975, CESifo.
    • Handle: RePEc:ces:ceswps:_8975
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    2. Grunewald, Andreas & Klockmann, Victor & von Schenk, Alicia & von Siemens, Ferdinand, 2024. "Are biases contagious? The influence of communication on motivated beliefs," W.E.P. - Würzburg Economic Papers 109, University of Würzburg, Department of Economics.

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    More about this item

    Keywords

    beliefs; Bayes’ rule; asymmetric updating; overconfidence; motivated reasoning;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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