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Motivated Beliefs and Anticipation of Uncertainty Resolution

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  • Christoph Drobner

Abstract

Manipulating 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.

Suggested Citation

  • Christoph Drobner, 2022. "Motivated Beliefs and Anticipation of Uncertainty Resolution," American Economic Review: Insights, American Economic Association, vol. 4(1), pages 89-105, March.
    • Handle: RePEc:aea:aerins:v:4:y:2022:i:1:p:89-105
    DOI: 10.1257/aeri.20200829
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    Citations

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    Cited by:

    1. Charlotte Cordes & Jana Friedrichsen & Simeon Schudy, 2023. "Motivated Procrastination," Rationality and Competition Discussion Paper Series 471, CRC TRR 190 Rationality and Competition.
    2. Castagnetti, Alessandro & Schmacker, Renke, 2022. "Protecting the ego: Motivated information selection and updating," European Economic Review, Elsevier, vol. 142(C).
    3. Riehm, Tobias, 2022. "Motivated beliefs in auctions," ZEW Discussion Papers 22-062, ZEW - Leibniz Centre for European Economic Research.
    4. Markus M. Möbius & Muriel Niederle & Paul Niehaus & Tanya S. Rosenblat, 2022. "Managing Self-Confidence: Theory and Experimental Evidence," Management Science, INFORMS, vol. 68(11), pages 7793-7817, November.
    5. Cavalan, Quentin & de Gardelle, Vincent & Vergnaud, Jean-Christophe, 2023. "No evidence of biased updating in beliefs about absolute performance: A replication and generalization of Grossman and Owens (2012)," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 530-548.
    6. Samir Huseynov, 2023. "ChatGPT and the Labor Market: Unraveling the Effect of AI Discussions on Students' Earnings Expectations," Papers 2305.11900, arXiv.org, revised Aug 2023.
    7. Batmanov, Alisher & Grigoryeva, Idaliya, 2023. "Motivated Beliefs & Anticipation of Uncertainty Resolution: A Note," I4R Discussion Paper Series 65, The Institute for Replication (I4R).
    8. 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.

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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