Access-Based Beliefs: Do individuals experience sour grapes over unattainable alternatives?

Abstract

Access-based beliefs are the notion that the probability of obtaining an alternative in a choice set may directly impact beliefs about its value. Individuals may make themselves feel better by lowering beliefs of alternatives to which they have limited access; conversely, individuals may find inaccessible alternatives more appealing and increase beliefs of their value. We interpret the first sensation as sour grapes and the second as the grass-is-greener. In a controlled lab experiment that precludes learning, we examine how the probability of obtaining a binary ambiguous prospect influences beliefs. We find that a 60 p.p. reduction in access decreases beliefs of the likelihood of a high contingent payout by 3 p.p. (.2 standard deviations) amongst subjects with coherent beliefs, thus showing that the sour grapes channel outweighs the grass-is-greener in a context that resembles real economic decisions, and demonstrating a novel violation of subjective expected utility. We use a Brunnermeier and Parker optimal beliefs model with an additional source of psychological utility, loss-aversion, to explain access-based beliefs and rule out prominent non-expected utility models as being able to explain our results. We discuss how sour grapes can lead to a belief-based poverty trap and present results of our experiment from India that show a stronger sour grapes effect.