Self-Serving Biases in Beliefs about Collective Outcomes

Shimon Kogan, Florian Schneider and Roberto A. Weber

No 8975, CESifo Working Paper Series from CESifo

Abstract: Beliefs about collective outcomes, such as economic growth or firm profitability, play an important role in many contexts. We study biases in the formation of such beliefs. Specifically, we explore whether over-optimism and self-serving biases in information processing—documented for beliefs about individual outcomes—affect beliefs about collective outcomes. We find that people indeed exhibit self-serving biases for collective outcomes, and that such biases are similar to biases for individual outcomes. In addition, we investigate whether collective self-delusion is mitigated by market institutions. If anything, biases in information processing are more pronounced in the presence of a market.

Keywords: beliefs; Bayes’ rule; asymmetric updating; overconfidence; motivated reasoning (search for similar items in EconPapers)
JEL-codes: C93 I18 Z13 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-evo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Self-serving biases in beliefs about collective outcomes (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8975

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