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Motivated Beliefs and Anticipation of Uncertainty Resolution

Author

Listed:
  • Christoph Drobner

    (Technical University of Munich)

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 expost 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, 2020. "Motivated Beliefs and Anticipation of Uncertainty Resolution," Munich Papers in Political Economy 07, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.
    • Handle: RePEc:aiw:wpaper:07
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Motivated beliefs; Optimistic belief updating; Ex-post rationalization; Bayes' rule; Expectations about uncertainty resolution;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • 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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