Confusing Context with Character: Correspondence Bias in Economic Interactions

Yi Han (), Yiming Liu () and George Loewenstein
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Yi Han: School of Applied Economics, Renmin University of China, 100872 Beijing, China
Yiming Liu: Humboldt University of Berlin, 10178 Berlin, Germany; WZB Berlin Social Science Center, 10785 Berlin, Germany

Management Science, 2023, vol. 69, issue 2, 1070-1091

Abstract: When drawing inferences about a person’s personal characteristics from the person’s actions, “correspondence bias” is the tendency to overestimate the influence of those characteristics and underestimate the influence of situational factors, such as incentives the individual faces. We build a simple framework to formalize correspondence bias and test its predictions in an online experiment. Consistent with correspondence bias, subjects are, on average, willing to pay to receive the dictator-game givings of an individual with whom they are randomly assigned to play a game that encourages cooperation rather than one with whom they play a game that encourages selfish behavior. We show, further, that experiencing both games oneself, as opposed to playing one and observing the other, reduces the bias, and receiving information about how each of the players behaved in both games eliminates it.

Keywords: belief updating; attribution bias; incentives; experiments (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:2:p:1070-1091

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