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Motivated naivete

Rui Tang and Mu Zhang

Journal of Economic Theory, 2023, vol. 209, issue C

Abstract: We study a decision maker's ex-ante choices over menus. The decision maker has in mind a set of possible future preferences that can be justified, for instance, by her past behavior, and she naively evaluates each menu according to the best option in the menu among those that can be rationalized by her future preferences. We provide a characterization for this menu preference, discuss the uniqueness of its representation, and propose a comparative measure of the decision maker's naivete. We apply our model to study two behavioral biases: naivete about present bias and the disjunction effect.

Keywords: Motivated reasoning; Naivete; Menu preference; Present bias; Disjunction effect (search for similar items in EconPapers)
JEL-codes: D01 D91 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:209:y:2023:i:c:s0022053123000327

DOI: 10.1016/j.jet.2023.105636

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