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The Economics of Motivated Beliefs

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  • Roland Bénabou

Abstract

I present the key ideas and results from recent work incorporating ?motivated? belief distortions into Economics, both at the individual level (overconfidence, wishful thinking, willful blindness) and at the social one (groupthink, team morale, market exuberance and crises). To do so I develop a flexible model that unifies much of this line of research, then relate its main assumptions and testable predictions to the relevant experimental and observational evidence.

Suggested Citation

  • Roland Bénabou, 2015. "The Economics of Motivated Beliefs," Revue d'économie politique, Dalloz, vol. 125(5), pages 665-685.
    • Handle: RePEc:cai:repdal:redp_255_0665
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    Citations

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    Cited by:

    1. González-Jiménez, Víctor, 2022. "Social status and motivated beliefs," Journal of Public Economics, Elsevier, vol. 211(C).
    2. Prati, Alberto & Saucet, Charlotte, 2024. "The causal effect of a health treatment on beliefs, stated preferences and memories," LSE Research Online Documents on Economics 122150, London School of Economics and Political Science, LSE Library.
    3. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2018. "The spillover effects of affirmative action on competitiveness and unethical behavior," European Economic Review, Elsevier, vol. 101(C), pages 567-604.
    4. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2020. "Feedback spillovers across tasks, self-confidence and competitiveness," Games and Economic Behavior, Elsevier, vol. 123(C), pages 127-170.
    5. Ritwik Banerjee & Nabanita Datta Gupta & Marie Claire Villeval, 2018. "Self Confidence Spillovers and Motivated Beliefs," Economics Working Papers 2018-02, Department of Economics and Business Economics, Aarhus University.
    6. Faia, Ester & Fuster, Andreas & Pezone, Vincenzo & Zafar, Basit, 2021. "Biases in information selection and processing: Survey evidence from the pandemic," SAFE Working Paper Series 307, Leibniz Institute for Financial Research SAFE.
    7. Couttenier, Mathieu & Hatte, Sophie & Vlachos, Stephanos & Thoenig, Mathias, 2019. "The Logic of Fear - Populism and Media Coverage of Immigrant Crimes," CEPR Discussion Papers 13496, C.E.P.R. Discussion Papers.
    8. J Anthony Cookson & Joseph E Engelberg & William Mullins & Hui Chen, 0. "Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(4), pages 863-893.
    9. Elias Tsakas, 2022. "Belief identification with state-dependent utilities," Papers 2203.10505, arXiv.org, revised Nov 2022.
    10. Cookson, J. Anthony & Engelberg, Joseph E. & Mullins, William, 2020. "Echo Chambers," SocArXiv n2q9h, Center for Open Science.
    11. Elias Tsakas, 2023. "Belief identification by proxy," Papers 2311.13394, arXiv.org.
    12. 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.
    13. Betts,Alexander Milton Stedman & Stierna,Maria Flinder & Omata,Naohiko & Sterck,Olivier Christian Brigitte, 2022. "Social Cohesion and Refugee-Host Interactions : Evidence from East Africa," Policy Research Working Paper Series 9917, The World Bank.
    14. Payzan-LeNestour, Elise & Woodford, Michael, 2022. "Outlier blindness: A neurobiological foundation for neglect of financial risk," Journal of Financial Economics, Elsevier, vol. 143(3), pages 1316-1343.
    15. Gonzalez Jimenez, Victor, 2016. "Believe Me, You are (not) that Bad," Other publications TiSEM 25ded0a5-f9c2-48d9-befe-5, Tilburg University, School of Economics and Management.
    16. Martin, Thomas & Sgroi, Daniel, 2022. "Satisfaction and the potentially misleading power of counter-factual reasoning : a field study set before, during and after the COVID-19 lockdown," The Warwick Economics Research Paper Series (TWERPS) 1443, University of Warwick, Department of Economics.

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