Motivated Beliefs and Biases

Abstract

This dissertation examines belief formation in a variety of decision-making settings. Chapter One explores how individuals manage to view themselves as altruistic even though they behave selfishly. In particular, I present one mechanism, namely belief manipulation, that allows individuals to achieve this. Chapter Two examines the way in which individuals overestimate the commonness of their own preferences. Specifically, as individuals form beliefs about the distribution of types, they systematically skew the true distribution of types according to their own position in the distribution. Chapter Three investigates the effect of contextual framing on risk preferences. For example, individuals behave in a more risk-seeking way when asked to imagine a situation in which their genetic data is at risk than when they are asked to imagine a situation in which their financial data is at risk.