Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92607
Authors: 
Ishida, Junichiro
Year of Publication: 
2010
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 771
Abstract: 
This paper explores the consequences of cognitive dissonance, coupled with timeinconsistent preferences, in an intertemporal decision problem with two distinct goals: acting decisively on early information (vision) and adjusting flexibly to late information (flexibility). The decision maker considered here is capable of manipulating information to serve her self-interests, but a tradeoff between distorted beliefs and distorted actions constrains the extent of information manipulation. Building on this tradeoff, the present model provides a unified framework to account for the conformity bias (excessive reliance on precedents) and the confirmatory bias (excessive attachment to initial perceptions).
Subjects: 
Cognitive dissonance
Vision
Flexibility
Conformity bias
Confirmatory bias
JEL: 
D03
D99
Document Type: 
Working Paper

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