Journal
GAMES AND ECONOMIC BEHAVIOR
Volume 104, Issue -, Pages 1-23Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/j.geb.2017.02.015
Keywords
Confirmation bias; Motivated beliefs; Bayesian updating; Experiment
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We investigate whether the confirmation bias is mitigated in signal-extraction environments by outside financial interests. We include a background strategic consideration leading to 'motivated beliefs' for people in one role, as they receive higher equilibrium payoffs in a background game in one of two states, while people in the other role receive the same equilibrium payoffs in both. We find systematic differences in beliefs and our results suggest that players with motivated beliefs deviate less from Bayesian updating. However, such players still exhibit a confirmation bias in that they place additional weight on confirming information, in contrast to Bayesians. (C) 2017 Elsevier Inc. All rights reserved.
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