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Titel: 

Belief updating: Does the 'good-news, bad-news' asymmetry extend to purely financial domains?

Dokument gelöscht auf Wunsch der Autor:in bzw. der Herausgeber:in.

Autor:innen: 
Erscheinungsjahr: 
2016
Schriftenreihe/Nr.: 
WZB Discussion Paper No. SP II 2016-309
Verlag: 
Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin
Zusammenfassung: 
Bayes' statistical rule remains the status quo for modeling belief updating in both normative and descriptive models of behavior under uncertainty. Recent research has questioned the use of Bayes' rule in descriptive models of behavior, presenting evidence that people overweight 'good news' relative to 'bad news' when updating ego-relevant beliefs. In this paper, we present experimental evidence testing whether this 'good-news, bad-news' effect extends to belief updating in the domain of financial decision making, i.e. the domain of most applied economic decision making. We find no evidence of asymmetric updating in this domain. In contrast, the average participant in our experiment is strikingly close to Bayesian in her belief updating. However, we show that this average behavior masks the existence of three distinct types of updating behavior - each of which is distinct from Bayesian, but none of which displays the 'good-news, bad-news' effect.
Schlagwörter: 
economic experiments
Bayes' rule
asymmetric belief updating
belief measurement
proper scoring rules
subjective probability
motivated beliefs
JEL: 
C11
C91
D83
Dokumentart: 
Working Paper

Datei(en):
Dokument gelöscht auf Wunsch der Autor:in bzw. der Herausgeber:in am: 16. Juli 2019


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