What You See is All There is

Abstract

In the contexts of social networks and the news media alike, people often select into environments in which they are predominantly exposed to information that confirms their prior beliefs, hence introducing a selection problem into the belief formation process. This paper shows experimentally that many people do not take into account how their own prior decisions shape their informational environment, but rather largely base their views on their local information sample. In consequence, beliefs excessively depend on people’s priors and tend to be too extreme, akin to popular concerns about echo chambers driving irrational belief polarization across social groups. The distribution of individuals’ naivete follows a pronounced bimodal structure – people either fully account for the selection problem or do not adjust for it at all. Allowing for interaction between these heterogeneous updating types induces little learning: neither the endogenous acquisition of advice nor exogenously induced dissent lead to a convergence of beliefs across types, suggesting that the belief heterogeneity induced by selected information may persist over time. Finally, the paper also sheds light on the cognitive mechanisms underlying selection neglect as well as its relationship to neglecting double-counting problems.