Causal Narratives

Chad Kendall and Constantin Charles

No 30346, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study causal narratives – narratives which describe a (potentially incorrect) causal relationship between variables. In a series of experiments across a range of data-generating processes, we show that exogenously generated causal narratives manipulate decisions in ways inconsistent with rational theory. Instead, decisions are generally consistent with a behavioral theory, but with important exceptions, including when subjects face multiple narratives with contradictory recommendations. To study the generation and transmission of causal narratives, we show that they arise endogenously when subjects observe a dataset and provide advice to future subjects. These homegrown causal narratives mislead both the sender and receiver.

JEL-codes: D03 D90 (search for similar items in EconPapers)
Date: 2022-08
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-hpe
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