Motivated Errors

Christine L. Exley () and Judd B. Kessler ()
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Christine L. Exley: Harvard Business School, Negotiation, Organizations & Markets Unit
Judd B. Kessler: The Wharton School, University of Pennsylvania.

No 18-017, Harvard Business School Working Papers from Harvard Business School

Abstract: Behavioral biases that cause errors in decision making are often blamed on cognitive limitations. We show that biases can also arise, or be exacerbated, because agents are motivated to make errors. In three experiments involving nearly 3200 participants, agents motivated to be selfish make simple computational errors and respond to the salience of information known to them, and agents motivated to believe they are high ability update on entirely uninformative signals. When we remove self-serving motives, agents appear completely (or much more) rational. Biases due to motivated errors survive standard debiasing interventions including providing experience, ensuring attention, and simplifying decisions.

Pages: 75 pages
Date: 2017-08, Revised 2018-05
New Economics Papers: this item is included in nep-exp and nep-hpe
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