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Title:

Motivated Belief Updating and Rationalization of Information

Document type:
Munich Papers in Political Economy
Author(s):
Drobner, Christoph; Goerg, Sebastian J.
Abstract:
We study belief updating about relative performance in an ego-relevant task. Manipulating the perceived ego-relevance of the task, we show that subjects update their beliefs about relative performance more optimistically as direct belief utility increases. This finding provides clean evidence for the optimistic belief updating hypothesis and supports theoretical models with direct belief utility. Moreover, we document that subjects, who received more bad signals, downplay the ego-relevance of th...     »
Keywords:
Motivated beliefs; Optimistic belief updating; Direct belief utility; Bayes' rule; Ex-post rationali
Contracting organization:
Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich
Year:
2021
Monat:
December
WWW:
https://ideas.repec.org/p/aiw/wpaper/18.html
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