I’ll See It When I Believe It: A Simple Model of Cognitive Consistency

Leeat Yariv
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Leeat Yariv: University of California at Los Angeles

Working Papers from Princeton University. Economics Department.

Abstract: Many observations from psychology, political science, and organizational behavior indicate that people exhibit a taste for consistency. Individuals are inclined to interpret new evidence in ways that confirm their pre-existing beliefs. They also tend to change their beliefs to enhance the desirability of their past actions. The current paper explores the implications of a simple model incorporating these effects into an agent’s utility function. The model allows a characterization of when: 1. agents become under- and over-confident, 2. agents prefer less accurate signals, i.e., they are willing to pay in order to forgo information, and 3. agents exhibit excess stickiness or excess volatility in action choices.

Keywords: Belief utility; cognitive dissonance; confirmatory bias; overconfidence; selective exposure (search for similar items in EconPapers)
JEL-codes: C90 D72 D83 D91 M30 (search for similar items in EconPapers)
Date: 2005-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2005-3

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