The Ability to 'Distill the Truth'

Tiziana Assenza

No 21-1280, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Employing a representative US online panel, we document strong imprecision in people’s beliefs about their ability to assess the accuracy of news headlines. With a randomized information experiment, we show that revelation of the true abil- ity causally adjusts beliefs and improves their precision. The effect is stronger for subjects who are overconfident about own ability and this is driven by gender dif- ferences in the reaction to this information. Finally, we also find that the provision of information on ability increases the willingness to pay for an insurance against the risk of being harmed by misinformation, among risk-averse participants.

Date: 2021-12-20, Revised 2022-03
New Economics Papers: this item is included in nep-dcm and nep-exp
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