Abstract
Investors’ belief-updating is often influenced by factors such as the current investment position and whether information is subjectively favorable. Such motivated beliefs can lead to profit harming decisions. We argue that the degree of involvement with the development of an investment is a driver of such motivated beliefs. In a pre-registered experiment we aim to lower involvement by delaying information and committing participants to a portfolio. We show that this brings participants’ beliefs significantly closer to a Bayesian benchmark. Separating information processing and belief-updating from decisions thus appears as a promising and easy to implement intervention to improve financial decisions.
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