Motivated Optimism and Workplace Risk

Abstract

We provide field evidence that individuals engage in motivated optimism in the face of impending risk, and that their belief distortions are time- and stake-dependent. Our study leverages exogenous variation in when people are required to return to their workplaces during the COVID-19 pandemic. Among workers currently staying at home, individuals who are temporally closer to returning to their workplace are relatively more optimistic about the increase in infection risk associated with going back. Temporal belief differences are larger for people who are more likely to get severely ill if infected.

JEL Classification: D84, D91, I12, J28