Compressed Beliefs

Christian Zihlmann

No 544, FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland

Abstract: Subjective beliefs are central to economic inference, and incentive-compatible belief elicitation mechanisms are widely assumed to identify these latent objects. This paper shows that elicited belief reports causally depend on an uninformative cognitive default induced by the elicitation design. From the lab to sports betting to official inflation expectations, reported beliefs are highly malleable, even under theoretically and behaviorally compatible incentives. I propose experimentally varying the cognitive default during belief elicitation. This exogenous variation allows the construction of inferred beliefs that are stable across elicitation designs and empirically outperform incentivized reports in predicting realized outcomes and participants’ own behavior.

Keywords: Belief Elicitation; Subjective Beliefs; Probabilistic Beliefs; Cognitive Default; Field Evidence (search for similar items in EconPapers)
JEL-codes: C81 C90 D81 D83 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2026-01-01
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