Motivated Mislearning: The Case of Correlation Neglect

72 Pages Posted: 4 Jul 2022

See all articles by Qiaofeng Fan

Qiaofeng Fan

Stanford University

Lukas Bolte

Stanford University - Department of Economics

Abstract

We design an experiment to study the role of motivated reasoning in correlation neglect. Participants receive potentially redundant signals about an ego-relevant state—their IQ test performance. We elicit their belief that the signals came from the same source (and thus contain redundant information). Participants generally underappreciate the extent to which identical signals are more likely to come from the same source, but the bias is significantly stronger for good (ego-favorable) signals than for bad (ego-unfavorable) signals. This asymmetric effect disappears in a control treatment where the state is ego-irrelevant. These results suggest that individuals may neglect the correlation between desirable signals to sustain motivated beliefs. However, the estimated effect is not quantitatively large enough to generate significant asymmetric updating about own IQ test performance.

Keywords: Beliefs, cognitive errors, correlation neglect, motivated reasoning, belief-based utility

Suggested Citation

Fan, Qiaofeng and Bolte, Lukas, Motivated Mislearning: The Case of Correlation Neglect. Available at SSRN: https://ssrn.com/abstract=4153191 or http://dx.doi.org/10.2139/ssrn.4153191

Qiaofeng Fan (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Lukas Bolte

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
STANFORD, CA 94305-6072
United States

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