Updating Beliefs When Evidence Is Open to Interpretation: Implications for Bias and Polarization

44 Pages Posted: 5 Jun 2013 Last revised: 29 Apr 2018

Roland G. Fryer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; University of Chicago

Philipp Harms

University of Freiburg - Institut für Mathematische Stochastik

Matthew O. Jackson

Stanford University - Department of Economics; Santa Fe Institute; Canadian Institute for Advanced Research (CIFAR)

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2018

Abstract

We introduce a model in which agents observe signals about the state of the world, and some signals are open to interpretation. Our decision makers first interpret each signal based on their current belief and then form a posterior on the sequence of interpreted signals. This ‘double updating’ leads to confirmation bias and can lead agents who observe the same information to polarize. We explore the model’s predictions in an on-line experiment in which individuals interpret research summaries about climate change and the death penalty. Consistent with the model, there is a significant relationship between an individual’s prior and their interpretation of the summaries; and over half of the subjects exhibit polarizing behavior.

Keywords: beliefs, polarization, learning, updating, Bayesian updating, biases, discrimination, decision making

JEL Classification: D10, D80, J15, J71, I30

Suggested Citation

Fryer, Roland G. and Harms, Philipp and Jackson, Matthew O., Updating Beliefs When Evidence Is Open to Interpretation: Implications for Bias and Polarization (February 1, 2018). Available at SSRN: https://ssrn.com/abstract=2263504 or http://dx.doi.org/10.2139/ssrn.2263504

Roland G. Fryer

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

American Bar Foundation

750 N. Lake Shore Drive
Chicago, IL 60611
United States

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Philipp Harms

University of Freiburg - Institut für Mathematische Stochastik ( email )

Freiburg, 79104
Germany

Matthew O. Jackson (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
1-650-723-3544 (Phone)

HOME PAGE: http://www.stanford.edu/~jacksonm

Santa Fe Institute

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Canadian Institute for Advanced Research (CIFAR) ( email )

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

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