Bénabou and Tirole (2016) on Motivated Beliefs

Roland Bénabou and Jean Tirole, “Mindful Economics: The Production, Consumption, and Value of Beliefs.” Journal of Economic Perspectives 30(3): 141-164, Summer 2016.

• People value their beliefs, both directly and for instrumental reasons; therefore, beliefs can withstand counter-evidence, and people may prefer to steer clear of evidence.

• Positive beliefs can be nurtured by responding asymmetrically to good and bad news.

• Shared beliefs also can be resistant to evidence, possibly with dreadful consequences.

• Bénabou et Tirole treat beliefs as if they were standard economic goods or assets, which people consume, invest in, produce, and so on.

• Optimism can serve as a sort of commitment device to stick with long-term projects and to avoid temptation. False beliefs can also influence other people in a way that might serve your interests. Religious beliefs might contribute both to self-discipline and to improve your view of yourself and your future. 

• Methods to protect valued beliefs include “strategic ignorance, reality denial, and self-signaling [p. 144].” More educated people are not better shielded from employing these methods. 

• Confirmation bias allows people to believe that their previous views have been corroborated. They anticipate this future corroboration, and this allows them to take on risky projects. 

• Emotional responses to a challenge to your beliefs are a signal that your beliefs are something you are trying to protect. Standard rationality suggests that challenges should be welcomed -- shades of  J. S. Mill.

• There’s a trade-off between accepting bad news and optimizing decisions given reality versus living in blissful ignorance for awhile before the piper must be paid. 

• Because it is easier to recall our actions than it is to recall our motives, we might try to self-signal, by choosing actions that will allow us to later have a good (but distorted) view of ourselves. 

• In laboratory experiments, subjects have a harder time remembering (accurately) their past failures.

• Self-deception rises with the size of the sunk costs. People persuade themselves of the future value of these investments. 

• People are quite good at believing they had sound reasons for their bad behaviors. 

• Blind persistence in social projects in the face of bad news might make the situation more tolerable. But if persistence can lead to bigger losses, watch out for “Mutually Assured Delusion.” Unfortunately, it is in this situation that denial becomes contagious. 

• Organizational failures might be a result of bad beliefs as much as bad incentives. 

• “Just-world” beliefs and the extent of the welfare state are negatively correlated. 

• Constitutional guarantees of free speech and a free press might serve as a commitment device to allow dissent even in the future bad states – and reduce the protection of current beliefs, because of the increased likelihood that they will be challenged, anyway.