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Motivated Errors

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  • Christine L. Exley

    () (Harvard Business School, Negotiation, Organizations & Markets Unit)

  • Judd B. Kessler

    () (The Wharton School, University of Pennsylvania.)

Abstract

Behavioral biases that cause errors in decision making are often blamed on cognitive limitations. We show that biases can also arise, or be exacerbated, because agents are motivated to make errors. In three experiments involving nearly 3200 participants, agents motivated to be selfish make simple computational errors and respond to the salience of information known to them, and agents motivated to believe they are high ability update on entirely uninformative signals. When we remove self-serving motives, agents appear completely (or much more) rational. Biases due to motivated errors survive standard debiasing interventions including providing experience, ensuring attention, and simplifying decisions.

Suggested Citation

  • Christine L. Exley & Judd B. Kessler, 2017. "Motivated Errors," Harvard Business School Working Papers 18-017, Harvard Business School, revised May 2018.
  • Handle: RePEc:hbs:wpaper:18-017
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