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The Economics of Motivated Beliefs

Roland Benabou ()

Revue d'économie politique, 2015, vol. 125, issue 5, 665-685

Abstract: I present the key ideas and results from recent work incorporating ?motivated? belief distortions into Economics, both at the individual level (overconfidence, wishful thinking, willful blindness) and at the social one (groupthink, team morale, market exuberance and crises). To do so I develop a flexible model that unifies much of this line of research, then relate its main assumptions and testable predictions to the relevant experimental and observational evidence.

Keywords: beliefs; wishful thinking; overconfidence; hubris; groupthink; group morale; organizational culture; market exuberance; speculative bubbles; financial crisis; cognitive biases; cognitive dissonance; motivated cognition; anticipatory utility; memory; non-bayesian updating; information aversion; willful ignorance; psychology (search for similar items in EconPapers)
Date: 2015
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