Testing models of belief bias

Detalhes bibliográficos
Autor(a) principal: Coutts, Alexander
Data de Publicação: 2019
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: https://doi.org/10.1016/j.geb.2018.11.001
Resumo: Submitted 2015
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spelling Testing models of belief biasan experimentAffective expected utilityAnticipationBeliefsOptimismOverconfidencePessimismFinanceEconomics and EconometricsSubmitted 2015Optimistic beliefs affect important areas of economic decision making, yet direct knowledge on how belief biases operate remains limited. To better understand these biases I introduce a theoretical framework that trades off anticipatory benefits against two potential costs of forming biased beliefs: (1) material costs which result from poor decisions, of Brunnermeier and Parker (2005), and (2) direct psychological costs of distorting reality, of Bracha and Brown (2012). The experiment exploits the potential of the BDM elicitation procedure adopted to lotteries to distort beliefs in different directions, depending on which costs are most important. Relative to an elicitation procedure without distortionary incentives, beliefs are biased in the optimistic direction. Increasing payments for accuracy further increases belief reports, in many cases away from the truth, consistent with psychological costs of belief distortion. Yet the overall results suggest that such theories of optimism fail to explain how beliefs respond to financial incentives.NOVA School of Business and Economics (NOVA SBE)RUNCoutts, Alexander2019-01-17T23:43:06Z2019-012019-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://doi.org/10.1016/j.geb.2018.11.001eng0899-8256PURE: 6590399http://www.scopus.com/inward/record.url?scp=85057417695&partnerID=8YFLogxKhttps://doi.org/10.1016/j.geb.2018.11.001info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T04:27:53Zoai:run.unl.pt:10362/57814Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:33:07.342573Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Testing models of belief bias
an experiment
title Testing models of belief bias
spellingShingle Testing models of belief bias
Coutts, Alexander
Affective expected utility
Anticipation
Beliefs
Optimism
Overconfidence
Pessimism
Finance
Economics and Econometrics
title_short Testing models of belief bias
title_full Testing models of belief bias
title_fullStr Testing models of belief bias
title_full_unstemmed Testing models of belief bias
title_sort Testing models of belief bias
author Coutts, Alexander
author_facet Coutts, Alexander
author_role author
dc.contributor.none.fl_str_mv NOVA School of Business and Economics (NOVA SBE)
RUN
dc.contributor.author.fl_str_mv Coutts, Alexander
dc.subject.por.fl_str_mv Affective expected utility
Anticipation
Beliefs
Optimism
Overconfidence
Pessimism
Finance
Economics and Econometrics
topic Affective expected utility
Anticipation
Beliefs
Optimism
Overconfidence
Pessimism
Finance
Economics and Econometrics
description Submitted 2015
publishDate 2019
dc.date.none.fl_str_mv 2019-01-17T23:43:06Z
2019-01
2019-01-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://doi.org/10.1016/j.geb.2018.11.001
url https://doi.org/10.1016/j.geb.2018.11.001
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 0899-8256
PURE: 6590399
http://www.scopus.com/inward/record.url?scp=85057417695&partnerID=8YFLogxK
https://doi.org/10.1016/j.geb.2018.11.001
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
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repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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