Newswise – A new paper published in the Journal of the European Economic Association , by Oxford University Press shows that people tend to tell us what we want to hear and ignore those who tell us the opposite. People with similar beliefs tend to be more biased than those who share them.
While it might seem reasonable to assume that people make decisions based only on experience and evidence, research has shown that decision-makers have “motivated beliefs”. They believe certain things because they want them to be true. It is possible to have serious biases caused by motivated beliefs and the reasoning that supports them. It has been suggested that misinformation is a result of motivated beliefs. These beliefs could also be responsible for stock market performance. Although there is a lot of objective information about financial markets, group decision-making and encouragement (e.g. The Game Stop stock performance in winter 2021) could lead to financial instability and bubbles.
Researchers here used laboratory experiments to study whether such biases in beliefs grew more severe when people exchanged these beliefs with one another. Researchers matched subjects based upon their IQ scores. This meant that either one or both of them had scores above or below the median. They then shared beliefs about a belief they both believed to be true, namely that they belonged in the high IQ category.
The experiment showed that people who believe they are high IQ have a tendency to be more optimistic if they are matched with more optimistic individuals. However, an optimistic person will not change his beliefs if matched up with a more pessimistic counterpart. People with low intelligence are particularly susceptible to this effect, which can lead to severe biases. The results show that bias amplification is caused by people choosing to attribute greater informational value social signals that reinforce their belief motivations.
Halfway through the experiment researchers provided subjects with an impartial piece of information about which IQ groups they were in. This was very effective in removing biases from the initial exchange of beliefs. These results suggest that providing reliable, impartial sources of information could reduce motivated beliefs in environments like financial markets and echo chambers.
” This experiment supports many popular suspicions about why biased belief might be getting worse with the advent of the internet,” stated Ryan Oprea, one the paper’s authors. We now have a lot more information via social media, but we don’t know how accurate it is. We are often left to make decisions about how reliable and accurate different opinions and information sources are, and how much stock we should put in them. Our findings suggest that people solve this dilemma by giving credibility to sources telling them what they want to hear. This can lead to biased reasoning that becomes more severe over time. “
The paper “Social Exchange of Motivated Beliefs” is available (at midnight on Sep 14th ) at: https://doi.org/10.1093/jeea/jvab035.
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