Essays on Beliefs

Abstract

Beliefs govern how individuals interact with the world around them. Their pivotal role in decision-making processes has led to great interest in how they are formed and arguably of more importance, how they are changed. The conceptual framework of the neoclassical model relies on the assumption that individuals form their beliefs about an unobservable state of the world by incorporating all available information and that they process this information according to a normative updating rule. Together with the assumption that preferences are stable and egoistic, the resulting theoretical framework is in many cases a powerful predictor of human behavior. However, the simplicity of the model often does not live up to the complexity of human decision making and therefore produces predictions that are at odds with reality.<br /> The field of behavioral economics has sought to add depth to the neoclassical model by adapting the notions of maximization and preferences to incorporate systematic anomalies observed in the real world. A large literature within the field has also concerned itself with belief formation and persistence. Building on this literature, I endeavor to advance our understanding of human decision-making by studying the role of subjective beliefs. In particular, this thesis studies how biased beliefs can be changed and how they are formed. In chapter 1, I examine whether confronting people with contrasting viewpoints can change their beliefs about the people who hold those viewpoints. This question has grown in relevance as polarized beliefs, ensuing from a society in which individuals seek out information that predominantly confirms their beliefs, have risen to be a defining phenomenon of recent years. In chapters 2 and 3, I study how motives mold individuals' subjective beliefs. If individuals are motivated to protect certain beliefs, the normative updating rule of the neoclassical model is insufficient. To address these scenarios, this thesis utilizes multiple experimental methods and draws insights from the fields of psychology, political science, and sociology.<br /> A common thread of this thesis are the sources and consequences of distorted subjective beliefs and the question of how to thwart them. In the first chapter, I show that bringing together two contrary-minded individuals for a conversation can help to counteract negative consequences of rising political segregation by changing participants' beliefs about others and the state of the society. While biased beliefs were the point of origin in the first chapter, the following two chapters study the emergence of such beliefs. By exploring if individuals are willing to adopt extremely negative beliefs about an often marginalized group to justify selfish behavior, I test how far individuals are willing to go to protect desired beliefs. In the final chapter of this thesis, I suggest that individuals, in light of potentially damaging information, make self-serving attributions towards an external factor to uphold or even boost their self-view.