IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v92y2025i3p1532-1563..html

Imagining the Future: Memory, Simulation, and Beliefs

Author

Listed:
  • Pedro Bordalo
  • Giovanni Burro
  • Katherine Coffman
  • Nicola Gennaioli
  • Andrei Shleifer

Abstract

How do people form beliefs about novel risks, with which they have little or no experience? Motivated by survey data on beliefs about COVID we collected in 2020, we build a model based on the psychology of selective memory. When a person thinks about an event, different experiences compete for retrieval, and retrieved experiences are used to simulate the event based on how similar they are to it. The model predicts that different experiences interfere with each other in recall and that non-domain-specific experiences can bias beliefs based on their similarity to the assessed event. We test these predictions using data from our COVID survey and from a primed-recall experiment about cyberattack risk. In line with our theory of similarity-based retrieval and simulation, experiences and their measured similarity to the cued event help account for experience effects, priming effects, and the interaction of the two in shaping beliefs.

Suggested Citation

  • Pedro Bordalo & Giovanni Burro & Katherine Coffman & Nicola Gennaioli & Andrei Shleifer, 2025. "Imagining the Future: Memory, Simulation, and Beliefs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(3), pages 1532-1563.
    • Handle: RePEc:oup:restud:v:92:y:2025:i:3:p:1532-1563.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/restud/rdae070
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robert Mahlstedt & Sonja Settele & Johannes Wohlfart, 2026. "Unemployment Narratives," CESifo Working Paper Series 12591, CESifo.
    2. Malte Baader & Kai Barron & Anna Hochleitner & Jonas P. Kaiser, 2026. "The Stories We Tell: Societal Narratives and Support for the Far Right," Rationality and Competition Discussion Paper Series 586, CRC TRR 190 Rationality and Competition.
    3. Olena Kostyshyna & Isabelle Salle & Hung Truong, 2026. "Heterogeneity in the Formation of Inflation Expectations: Evidence from Micro Data," Tinbergen Institute Discussion Papers 26-036/VI, Tinbergen Institute.
    4. Kim Ristolainen, 2026. "Quantifying Minsky Cycles," Discussion Papers 173, Aboa Centre for Economics.
    5. Malte Baader & Kai Barron & Anna Hochleitner & Jonas P. Kaiser, 2026. "The Stories We Tell: Societal Narratives and Support for the Far Right," Berlin School of Economics Discussion Papers 0111, Berlin School of Economics.
    6. Can Celebi & Christine Exley & Soren Harrs & Hannu Kivimaki & Marta Serra-Garcia & Jeffrey Yusof, 2026. "The Collection of High-Quality Online Data," CESifo Working Paper Series 12535, CESifo.
    7. Malte Baader & Kai Barron & Anna Hochleitner & Jonas P. Kaiser, 2026. "The Stories We Tell: Societal Narratives and Support for the Far Right," CESifo Working Paper Series 12999, CESifo.
    8. Riccardo Ghidoni & David Schindler, 2026. "Contagious Prejudice: The Marocchinate," CESifo Working Paper Series 12376, CESifo.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:92:y:2025:i:3:p:1532-1563.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.