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Belief updating among college students: evidence from experimental variation in information

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Author Info

  • Matthew Wiswall
  • Basit Zafar

Abstract

We investigate how college students form and update their beliefs about future earnings using a unique “information” experiment. We provide college students true information about the population distribution of earnings and observe how this information causes respondents to update their beliefs about their own future earnings. We show that college students are substantially misinformed about population earnings and logically revise their self-beliefs in response to the information we provide, with larger revisions when the information is more specific and is good news. We classify the updating behaviors observed and find that the majority of students are non-Bayesian updaters.

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Bibliographic Info

Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 516.

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Date of creation: 2011
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Handle: RePEc:fip:fednsr:516

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Related research

Keywords: Prediction (Psychology) ; Wages ; Universities and colleges ; Demography ; Uncertainty ; Bayesian statistical decision theory;

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References

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Cited by:
  1. Tatyana Deryugina, 2013. "How do people update? The effects of local weather fluctuations on beliefs about global warming," Climatic Change, Springer, vol. 118(2), pages 397-416, May.
  2. Bradley, Elizabeth S., 2012. "The Effect of the Business Cycle on Freshman Major Choice," MPRA Paper 42412, University Library of Munich, Germany.

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