Belief Bias Research Articles

Repairing a Cracked Mirror: The Heterogeneous Effect of Personalized Digital Nudges Driven by Misperception

Our study aims to deepen the understanding of personalized digital nudges by evaluating their effects on energy‐saving behavior. We conducted a field experiment with a leading smart metering company in South Korea to investigate whether customers save more energy when a personalized goal and feedback are provided, and how the impacts of nudges vary according to the types of misperception. Specifically, we focused on the behavior of customers who underestimate or overestimate their past electricity usage compared to their actual consumption. We merged daily energy consumption with a pre‐experiment survey for the customers. We found that goal‐setting and feedback mechanisms have a markedly different impact on each type of misperception. Underestimating customers reduced energy consumption only under the “goal‐setting with feedback" treatment. Conversely, overestimating customers reduced energy consumption even under the “goal‐setting without feedback" condition. The underlying mechanism is suggested as updating biased beliefs toward goal achievement. Overall, the results demonstrate that personalized nudges lead to heterogeneous behavioral responses and that service providers and policymakers can use these signals to enrich their planning of behavioral nudges.

Racial disparities in observers' attention to and estimations of others' pain.

Research has demonstrated racial disparities in pain care such that Black patients often receive poorer pain care than White patients. Little is known about mechanisms accounting for the emergence of such disparities. The present study had 2 aims. First, we examined whether White observers' attentional processing of pain (using a visual search task [VST] indexing attentional engagement to and attentional disengagement from pain) and estimation of pain experience differed between White vs Black faces. Second, we examined whether these differences were moderated by (1) racially biased beliefs about pain experience and (2) the level of pain expressed by Black vs White faces. Participants consisted of 102 observers (87 females) who performed a VST assessing pain-related attention to White vs Black avatar pain faces. Participants also reported on racially biased beliefs about White vs Black individuals' pain experience and rated the pain intensities expressed by White and Black avatar faces. Results indicated facilitated attentional engagement towards Black (vs White) pain faces. Furthermore, observers who more strongly endorsed the belief that White individuals experience pain more easily than Black individuals had less difficulty disengaging from Black (vs White) pain faces. Regarding pain estimations, observers gave higher pain ratings to Black (vs White) faces expressing high pain and White (vs Black) faces expressing no pain. The current findings attest to the importance of future research into the role of observer attentional processing of sufferers' pain in understanding racial disparities in pain care. Theoretical and clinical implications are discussed, and future research directions are outlined.

Adverse Selection, Heterogeneous Beliefs, and Evolutionary Learning

We relax the common assumption of homogeneous beliefs in principal-agent relationships with adverse selection. Principals are competitors in the product market and write contracts also on the base of an expected aggregate. The model is a version of a cobweb model. In an evolutionary learning set-up, which is imitative, principals can have different beliefs about the distribution of agents’ types in the population. The resulting nonlinear dynamic system is studied. Convergence to a uniform belief depends on the relative size of the bias in beliefs.

The development of nurses' foundational values.

In the ever-changing and complex healthcare environment, nurses encounter challenging situations that may involve a clash between their personal and professional values resulting in a profound impact on their practice. Nevertheless, there is a dearth of literature on how nurses develop their personal-professional values. The aim of this study was to understand how nurses develop their foundational values as the base for their value system. A constructivist grounded theory methodology was employed to collect multiple data sets, including face-to-face focus group and individual interviews, along with anecdote and reflective stories. Fifty-four nurses working across various nursing settings in Indonesia were recruited to participate. Ethics approval was obtained from the Monash University Human Ethics Committee, project approval number 1553. Foundational values acquisition was achieved through family upbringing, professional nurse education and organisational/institutional values reinforcement. These values are framed through three reference points: religious lens, humanity perspective and professionalism. This framing results in a unique combination of personal-professional values that comprise nurses' values system. Values are transferred to other nurses either in a formal or informal way as part of one's professional responsibility and customary social interaction via telling and sharing in person or through social media. Values and ethics are inherently interweaved during nursing practice. Ethical and moral values are part of professional training, but other values are often buried in a hidden curriculum, and attained and activated through interactions during nurses' training. Developing a value system is a complex undertaking that involves basic social processes of attaining, enacting and socialising values. These processes encompass several intertwined entities such as the sources of values, the pool of foundational values, value perspectives and framings, initial value structures, and methods of value transference.

The causal impact of economics education on decision-making: Evidence from a natural experiment in China

We investigate the causal impact of collegiate economics courses on students’ decision-making. By exploiting a Chinese college-admission system that quasi-randomly assigns students to economics/business majors given students’ preferences and the College Entrance Exam’s cutoff scores for economics/business majors, we are able to isolate the treatment effects of an economics education on students’ responses to a decision-making survey. Specifically, we compare the survey responses of students who narrowly meet the cutoffs for the economics/business majors to those who do not and find that students educated in economics/business courses are more likely to be risk neutral and less prone to common biases in probabilistic beliefs. While students in economics/business majors do not show significant changes in social preferences, they appear more inclined to believe that others behave selfishly.

Apparent age and gender differences in survival optimism: To what extent are they a bias in the translation of beliefs onto a percentage scale?

AbstractA standard way to elicit expectations asks for the percentage chance an event will occur. Previous research demonstrates noise in reported percentages. The current research models a bias; a five percentage point change in reported probabilities implies a larger change in beliefs at certain points in the probability distribution. One contribution of my model is that it can parse bias in beliefs from biases in reports. I reconsider age and gender differences in Subjective Survival Probabilities (SSPs). These are generally interpreted as differences in survival beliefs, e.g., that males are more optimistic than females and older respondents are more optimistic than younger respondents. These demographic differences (in the English Longitudinal Study of Ageing) can be entirely explained by reporting bias. Older respondents are no more optimistic than younger respondents and males are no more optimistic than females. Similarly, in forecasting, information is obscured by taking reported percentages at face value. Accounting for reporting bias thus better exploits the private information contained in reports. Relative to a face-value specification, a specification that does this delivers improved forecasts of mortality events, raising the pseudo R-squared from less than 3 percent to over 6 percent.

Biased representations of controversial information: Certainty and justification beliefs as moderators

Pre-existing beliefs bias mental representations of socio-scientific controversies in favour of the perspective(s) that endorse(s) them. Several conditions have been proposed to moderate such belief-biased mental representations of controversial information. The present study examined the effects of readers’ prior beliefs on their mental models of textual information on the level of situation-model and text-base representations. The study further investigated the extent that author status, readers’ certainty and justification beliefs moderate the effect of prior beliefs on the readers’ representations. Sixty-two undergraduate students of English as a foreign language read two texts that provided arguments for and against an established controversy in language education. A recognition task was used to assess their situation-model and text-base strengths. The results revealed that readers’ representations were biased towards the information that supported their beliefs at the level of the situation model but not at the level of the text-base. The results further revealed no main or moderating effects for author status on the interaction of beliefs and readers’ mental models of the information. However, readers’ certainty beliefs and beliefs about justification for knowing were shown to moderate the belief-biased representation of the controversial information.

The micro and macro of managerial beliefs

This paper studies how biases in managerial beliefs affect managerial decisions, firm performance, and the macroeconomy. Using a new survey of US managers I establish three facts. (1) Managers are not overoptimistic: sales growth forecasts on average do not exceed realizations. (2) Managers are overprecise: they underestimate future sales growth volatility. (3) Managers overextrapolate: their forecasts are too optimistic after positive shocks and too pessimistic after negative shocks. To quantify the implications, I estimate a dynamic general equilibrium model in which managers of heterogeneous firms use a subjective beliefs process to make forward-looking hiring decisions. Overprecision and overextrapolation lead managers to overreact to firm-level shocks and overspend on adjustment costs, destroying 2.1% to 6.8% of the typical firm’s value. Pervasive overreaction leads to excess volatility and reallocation, lowering consumer welfare by 0.5% to 2.3% relative to the rational-expectations equilibrium. These findings suggest overreaction could amplify asset-price and business-cycle fluctuations.

Individual differences in epistemically suspect beliefs: the role of analytic thinking and susceptibility to cognitive biases

The endorsement of epistemically suspect (i.e., paranormal, conspiracy, and pseudoscientific) beliefs is widespread and has negative consequences. Therefore, it is important to understand the reasoning processes – such as lower analytic thinking and susceptibility to cognitive biases – that might lead to the adoption of such beliefs. In two studies, I constructed and tested a novel questionnaire on epistemically suspect beliefs (Study 1, N = 263), and used it to examine probabilistic reasoning biases and belief bias in syllogistic reasoning as predictors of the endorsement of those beliefs, while accounting for analytic thinking and worldview variables (Study 2, N = 397). Probabilistic reasoning biases, analytic thinking, religious faith, and political liberalism consistently predicted various epistemically suspect beliefs, whereas the effect of syllogistic belief bias was largely restricted to pseudoscientific beliefs. Further research will be needed to examine the role the biased evaluation of evidence plays in the endorsement of epistemically suspect beliefs.

Employee sentiment index: Predicting stock returns with online employee data

We propose an aggregate measure of employee sentiment based on millions of employee online reviews and we test whether big employee data embedded in expert financial models can improve stock return predictability. In line with behavioral finance theory, our results document that the collective employee sentiment is a strong predictor of stock market returns with lower future returns following high employee sentiment. This predictive power is more pronounced when the employee sentiment index is constructed using the expectations of employees about the near-term business outlook of their employer. Our market-wide sentiment measure has superior performance compared to existing proxies of investor sentiment and commonly-studied macroeconomic variables. The forward-looking property of this data is also evident in predicting industry returns or portfolio returns sorted on characteristics, such as size, age, risk, profitability, dividend payout, tangibility, financial constraints and growth opportunities. Importantly, market-wide employee sentiment has relative power in predicting future asset returns after controlling for firm-level employee sentiment. The predictive power of aggregate employee online data is explained by investors’ biased beliefs about expected cash flows and volatility. These results indicate that financial models can be enriched with sentiment factors derived from various big data sources and stakeholders, providing insights into mispriced assets and assisting investment decisions.

Learning and Teaching Latino Mental Health, Social Justice and Recovery to Visiting Students: A Pilot Study

Almost 18% of the U.S. population is estimated to be Hispanic (United States Census Bureau, 2019), and of that, 15% had a diagnosable mental illness in the past year (Substance Abuse and Mental Health Services Administration, 2020); still, Latinos receive half as often mental health services compared to Caucasians (Office of Mental Health, 2020). Evidence suggests that minority ethnic groups may receive more inferior care standards due to biased beliefs or attitudes held by health professionals (Shepherd et al., 2018). The number of Latino Psychiatrists is not enough to care for the on-growing Latino population in the U.S. (Alarcón, 2001; American Psychiatric Association, 2017). There is a need to train medical students and residents in cultural competencies pertained to the Latino Culture and Health Services (Alarcón, 2001). We developed a pilot study of a curriculum created by Latino bilingual and bicultural mental health providers. The course lessons include (a) Health Disparities and Implicit Bias, (b) Recovery in Mental Health, (c) Immigration and Acculturation, (d) Cultural Formulation Interview, (e) Latino Values, and (f) Mental Health Systems. All topics focused on Latino Mental Health and used the “reverse classroom” teaching technique with interactive exercises. We measured the impact on knowledge, attitudes, and comfort level related to the concept taught in the lessons of this course. Teaching Latino Mental Health has a positive impact on improving the comfort level and knowledge of students. Nevertheless, there are not enough educational opportunities and information about these topics. Therefore, replicating this curriculum and expanding the education in Latino Mental Health will improve the health services provided to this community.

Designing Effective and Acceptable Road Pricing Schemes: Evidence from the Geneva Congestion Charge

While instruments to price congestion exist since the 1970s, less than a dozen cities around the world have a cordon or zone pricing scheme. Geneva, Switzerland, may be soon joining them. This paper builds on a detailed review of the existing schemes to identify a set of plausible design options for the Geneva congestion charge. In turn, it analyzes their acceptability, leveraging a large survey of residents of both Geneva and the surrounding areas of Switzerland and France. Our original approach combines a discrete choice experiment with randomized informational treatments. We consider an extensive set of attributes, such as perimeter, price and price modulation, use of revenues, and exemption levels and beneficiaries. The informational treatments address potential biased beliefs concerning the charge’s expected effects on congestion and pollution. We find that public support depends crucially on the policy design. We identify an important demand for exemptions, which, albeit frequently used in the design of environmental taxation, is underexplored in the analysis of public support. This demand for exemptions is not motivated by efficiency reasons. It comes mostly by local residents, for local residents. Further, people show a marked preference for constant prices, even if efficiency would point to dynamic pricing based on external costs. Hence, we highlight a clear trade-off between efficiency and acceptability. However, we also show, causally, that this gap can in part be closed, with information provision. Analyzing heterogeneity, we show that preferences vary substantially with where people live and how they commute. Even so, we identify several designs that reach majority support.

Learning and Teaching Latino Mental Health, Social Justice and Recovery to Visiting Students: A Pilot Study

Almost 18% of the U.S. population is estimated to be Hispanic (United States Census Bureau, 2019), and of that, 15% had a diagnosable mental illness in the past year (Substance Abuse and Mental Health Services Administration, 2020); still, Latinos receive half as often mental health services compared to Caucasians (Office of Mental Health, 2020). Evidence suggests that minority ethnic groups may receive more inferior care standards due to biased beliefs or attitudes held by health professionals (Shepherd et al., 2018). The number of Latino Psychiatrists is not enough to care for the on-growing Latino population in the U.S. (Alarcón, 2001; American Psychiatric Association, 2017). There is a need to train medical students and residents in cultural competencies pertained to the Latino Culture and Health Services (Alarcón, 2001). We developed a pilot study of a curriculum created by Latino bilingual and bicultural mental health providers. The course lessons include (a) Health Disparities and Implicit Bias, (b) Recovery in Mental Health, (c) Immigration and Acculturation, (d) Cultural Formulation Interview, (e) Latino Values, and (f) Mental Health Systems. All topics focused on Latino Mental Health and used the “reverse classroom” teaching technique with interactive exercises. We measured the impact on knowledge, attitudes, and comfort level related to the concept taught in the lessons of this course. Teaching Latino Mental Health has a positive impact on improving the comfort level and knowledge of students. Nevertheless, there are not enough educational opportunities and information about these topics. Therefore, replicating this curriculum and expanding the education in Latino Mental Health will improve the health services provided to this community.

Restructuring, Insecurity and the Challenges of Development in Nigeria

The macabre of violence orchestrated by high degree of ethnic colouration and religious intolerance gave credence to this research topic. Overtime the Nigeria nation has been besieged by different altercations that have consequently retarded the pace of progress and development of the country. The study which adopted the frustration aggression theory and using the secondary data as a source submits that economic dissatisfaction arising from politics of exclusion, religious bias, leadership problem, insurgency among others have conspicuously created division among people who have agreed under one federating unit to live as one have rather consistently been denied their fair share of the "national cake". Consequently, this has led to bottled up anger, frustration and some level of disenchantment. It is against this backdrop that this paper seeks to interrogate-the nature and dimension of the Nigerian security situation and its slow pace development. The study concluded that the agitations for fair treatment, equal representation, effective governance are basic and necessary ingredients of restructuring that could help guarantee a peaceful co-existence devoid of rancour and acrimony. The study therefore among other things recommended that true federalism, good governance, justice would guarantee security and development in Nigeria.
 Keywords: Restructuring, Insecurity, Development, Underdevelopment

If You Don’t Believe in God, Do You at Least Believe in Aristotle? Evaluations of Religious Outgroup Members Hinge upon Moral Perceptions

ABSTRACT Religious people tend to believe atheists are immoral. Although some work suggests that atheists themselves agree, such findings could also reflect symmetric ingroup bias in the moral domain, where atheists likewise view religious targets as untrustworthy and immoral. We examined how American religious and atheist participants rated the morality of atheist and religious targets and assessed a potential intervention: learning that targets adhere to a moral code. Across three studies, both religious and nonreligious participants demonstrated clear ingroup favoritism, rating ingroup targets more moral than outgroup targets. However, this ingroup bias was reduced when participants learned the target adheres to a warm and coherent moral system rooted in philosophy and concern for others. These findings extended beyond evaluations to downstream social consequences such as distancing. Such findings challenge arguments that atheists view themselves as immoral and point the way forward toward reducing religious ingroup bias.

Asymptotic behavior of Bayesian learners with misspecified models

We consider an agent who represents uncertainty about the environment via a possibly misspecified model. Each period, the agent takes an action, observes a consequence, and uses Bayes' rule to update her belief about the environment. This framework has become increasingly popular in economics to study behavior driven by incorrect or biased beliefs. By first showing that the key element to predict the agent's behavior is the frequency of her past actions, we are able to characterize asymptotic behavior in general settings in terms of the solutions of a differential inclusion that describes the evolution of the frequency of actions. We then present a series of implications that can be readily applied to economic applications, thus providing off-the-shelf tools that can be used to characterize behavior under misspecified learning.

Competition and Distortion: A Theory of Information Bias on the Peer-to-Peer Lending Market

Despite the popular emergence of peer-to-peer (P2P) lending platforms, relevant research investigating the role of these platforms on P2P markets still lags. In this paper, we present a model to study the market incentives of P2P lending platforms' optimal information-reporting strategies when the following exist: (i) uncertainty on the return of loans and (ii) competition from entrants. We focus on the information bias of platforms driven by demand-side actors—investors’ optimism/pessimism about risk—while we keep the platforms being rational. We characterize platforms' equilibrium reporting strategies under different market conditions. Surprisingly, we find that when uncertainty is significant, and the threat of entry is strong but not detrimental, the platform has incentives to bias information toward investors' biased beliefs. This result demonstrates a case where competition and uncertainty may jointly lead to information bias. However, a properly designed uncertainty-resolution mechanism could reduce the incentive. Our findings contribute to the literature on the P2P lending market by analyzing platform decisions and offer policy implications for regulating P2P lending market.

‘You’re not Serving Time, You’re Serving Christ’: Protestant Religion and Discourses of Responsibilization in a Women’s Prison

AbstractCriminologists are increasingly concerned with how incarcerated persons navigate dominant carceral discourses. Insights from narrative criminology reveal that individuals draw on a variety of available discursive resources to adopt, subvert or negotiate dominant messages around what it means to be punished. This article draws on yearlong ethnographic observations inside one US state women’s prison to examine whether and how religion matters for responsibilization discourses promoted by state actors. Examining a case study of Protestant prison activities, I find that religious discourses served dual purposes in light of responsibilization. Interpretively, by describing prison as part of God’s plan, they offered a meaningful counterpoint that mitigated punitive discourses from prison officials. In practice, responsibilization discourses, filtered through the coercive carceral context, re-emerged through a normative religious lens with regard to prison rules and state authority. Considered at the intersection of race, class and gender, this article interrogates how women may draw on discourses from competing institutions such as religion in constructing self-narratives and enacting responsibilization, and how this matters for state control.

Estimating risk preferences integrating insurance choices with subjective beliefs

This paper combines real-world decisions with experimental elicitations to estimate risk preferences by incorporating individuals’ subjective beliefs in the analysis of insurance data. Unlike most studies estimating risk preferences “in the field”, we refrain from making specific assumptions regarding expectations; rather, we elicit them directly from the respondents. This approach yields risk aversion estimates compatible with a variety of deviations from rational expectations, such as biased subjective risk perceptions. Our results reveal that agents tend to overestimate the probability of recent rare events happening again in the recent future, and that the standard assumption of rational beliefs can lead to biased estimates and policy recommendations. Our empirical application offers new insights into the current debate on crop insurance subsidies. Correcting biased beliefs appears to be an effective strategy to reduce government support and, at the same time, maintain a high level of enrollment.

The Development of Cognitive Reflection in China.

Cognitive reflection is the tendency to override an intuitive response so as to engage in the reflection necessary to derive a correct response. Here, we examine the emergence of cognitive reflection in a culture that values nonanalytic thinking styles, Chinese culture. We administered a child-friendly version of the cognitive reflection test, the CRT-D, to 130 adults and 111 school-age children in China and compared performance on the CRT-D to several measures of rational thinking (belief bias syllogisms, base rate sensitivity, denominator neglect, and other-side thinking) and normative thinking dispositions (actively open-minded thinking and need for cognition). The CRT-D was a significant predictor of rational thinking and normative thinking dispositions in both children and adults, as previously found in American samples. Adults' performance on the CRT-D correlated with their performance on the original CRT, and children's performance on the CRT-D predicted rational thinking and normative thinking dispositions even after adjusting for age. These results demonstrate that cognitive reflection, rational thinking, and normative thinking dispositions converge even in a culture that emphasizes holistic, nonanalytic reasoning.