Motivated Memory in Economics—A Review
2. Theoretical Work
2.1. Bénabou and Tirole’s Framework
2.2. Other Motivated Memory Models
3. Empirical Evidence
3.1. Motivated Memory and Prosocial Behavior
3.2. Motivated Memory and Financial Decisions
3.3. Motivated Memory and IQ
3.4. Field Evidence on Motivated Memory
4. Discussion—Taking Stock
- Motivated memory has by now been found in a rather broad set of contexts, ranging from investment behavior to prosocial decision-making. What distinguishes these contexts is the object of and the reason for self-deception. This highlights that studies of motivated memory always jointly test the existence of motivated reasoning and selective recall as a supply-side mechanism. This provides an empirical challenge since an implicit assumption in empirical studies of selective recall is that subjects do have a motive for self-deception to begin with. The same challenge is of course also present in the study of other supply-side mechanisms. In fact, part of the reason why the literature on asymmetric updating has produced somewhat mixed results might be the joint testing of motivated reasoning plus asymmetry in updating.11
- Despite the pervasive evidence for motivated memory in different contexts, the literature has also identified important limits to selective recall. In particular, two patterns emerge: (i) substantial increases in stake size as in Gödker et al.  and Zimmermann  mitigate motivated memory and instead induce people to accurately remember both good and bad news; (ii) the announcement of a future recall task diminishes motivated memory, see Coffman et al.  and Zimmermann . In other words, when future recall tasks are anticipated, asymmetries in recall appear to vanish. In sum, the prevalence of motivated memory seems to depend heavily on features of the decision environment.
- A methodological pattern that emerges from existing work on motivated memory is that the role of selective recall is identified via delay between action taken or feedback provided and subsequent memory elicitation. Two comments seem in order: (i) so far, no consensus has emerged on the delay that is necessary for selective recall to emerge. In most existing studies, delay ranges between one and several weeks; (ii) implementing memory constraints via delay is different from the typical approach in studies of non-motivated recall, where memory constraints are made binding via interference (similar memory entries compete and interfere with each other, making retrieval of a specific memory cue less likely).12
- A further methodological pattern seems to be that, in most studies, the recall comes as a surprise. This again is in contrast with studies of non-motivated memory, where typically the entire experiment, including future recall elicitation is explained in advance. Importantly, as discussed, motivated memory appears to be mitigated when future recall tasks are announced.
- One empirical challenge is to establish causality in selective recall. Studies that have attempted to identify causality predominantly exploited noisy feedback provision (e.g., Gödker et al.  and Zimmermann ), where participants obtain noisy feedback about their own test performance on investment success, and the noise component allows for a causal identification of selective recall. In action-based paradigms such as prosocial behavior, causality is more difficult to establish, but causal interpretations have been bolstered by adding controls for memory performance (Saucet and Villeval ).
- In terms of the measurement of memory, the literature has mostly used incentivized recall paradigms, where participants receive a reward if recall accuracy is high. In terms of question format, different approaches have been followed (similar to some of the leading approaches in memory research, see Kahana ’s book): (i) in recognition paradigms, respondents are asked to recall past behavior or feedback received and are provided with several possible answers. The task then is to pick the correct one; (ii) free recall paradigms are similar in that subjects are also asked to recall past behavior or feedback received. However, they are not provided with a list of possible answers, but need to recall freely; (iii) in open texts paradigms, instead of being asked to recall specific events (e.g. past action or feedback), subjects are asked to describe certain aspects of an experiment or a decision environment. All these formats can be incentivized.13
5. Concluding Remarks
Institutional Review Board Statement
Informed Consent Statement
Conflicts of Interest
In turn, the “demand side” (Bénabou and Tirole ) of self-deception is concerned with why people might want to hold motivated beliefs. Several motives have been suggested. Köszegi  and Brunnermeier and Parker  formalize decision-makers who derive consumption utility from being optimistic about themselves and/or the future. Bénabou and Tirole  emphasize the motivational value of optimistic beliefs. Schwardmann and van der Weele  argued that people first need to deceive themselves in order to deceive others. More generally, the literature on social signaling emphasizes the role of (stated) optimism as a social signal (see Burks et al. ; Charness et al. ; Ewers and Zimmermann ).
With a slight abuse of terminology, we use motivated memory and motivated recall interchangeably.
In Bénabou and Tirole ’s paper, the skill parameter is more specifically interpreted as the probability of success of the project. This is just a normalization of any other dense set .
represents the set of possible signals the agent may observe at . As signals represent the agent’s information set in a given period, this includes the empty set (∅).
Recall of behavior of others might also be subject to motivated reasoning. People might want to believe that the world is just (Bénabou and Tirole ) and accordingly might have too rosy recollections of how they were treated in the past.
There is mixed evidence on the relationship between prosocial behavior and IQ. For example, Han et al.  report evidence in favor of this relation only for tasks with higher complexity. Guo et al. , instead, report a significant relationship between IQ and self-report measures of pro-social behavior.
Points (ii) to (iv) were elicited in random order.
To derive this result, the authors estimate a structural model featuring quasi-hyperbolic discounting and a parameter that allows for different degrees of naivete.
Eil and Rao  test how individuals acquire and process information in ego-relevant contexts, intelligence and beauty, showing evidence for asymmetric updating. Möbius et al.  report similar evidence of asymmetric updating and conservatism in the domain of beliefs concerning relative performance in an IQ test. Ertaç  also reports evidence of asymmetric updating, but in the opposite direction: participants react more to bad news about their performance, compared to good news. Sharot  show how people update their beliefs asymmetrically, reacting more to positive than negative news, relating this asymmetry to previous expectations and to variations in neural coding of positive and negative news. Schwardmann and van der Weele  reproduce results concerning asymmetric updating in the domain of intelligence tests, showing that such asymmetry towards positive self-image is fostered by motives to persuade others. Coutts  reports evidence of asymmetry and conservatism in belief updating also in financially relevant and not value-relevant domains, arguing that asymmetric updating in ego-relevant domains could also be not due to motivated reasoning. Barron  investigates updating in a financial domain, reporting no significant evidence of asymmetric updating.
Open text messages can be more difficult to incentivize. In Zimmermann , subjects receive a reward if a group of RAs judges the text as an accurate description of the object of interest.
With the current paradigms, it would be difficult to distinguish the demand value of motivated memory and the ability to forget information. How to disentangle these two elements is an open empirical challenge.
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|Delay||Announced Recall||Continuous Recall Object||Incentivized Recall||Causal Identification|
|Li (2013)||Treatment dependent: 0, 7 and 43 days||✗||✗||✓||✗|
|Carlson et al. (2018)||Participant dependent: ∼5 min||✗||✓||✓||✗|
|Chew et al. (2018)||Months (not further specified)||Not specified||✗||✓||✗|
|Saucet and Villleval (2019)||8 min||✗||✓||Treatment dependent: ✓/✗||✗|
|Galeotti et al. (2020)||3 weeks||✗||✓||✓||✗|
|Zimmermann (2020)||Treatment dependent: No Delay or 1 month||Treatment Dependent: ✓/✗||✓||✓||✓|
|Gödker et al. (2021)||Treatment dependent: 0 and 1 week||✗||✓||✓||✓|
|Huffman et al. (2021)||3 months||✗||✗||✓||✗|
|Müller (2021)||10 years||✗||✓||✓||✗|
|Roy-Chowdhury (2022)||Treatment dependent: 5 months and 3 weeks||✗||✗||✗||✗|
|Sial et al. (2023)||1 to 20 weeks||✗||✓||✗||✗|
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Amelio, A.; Zimmermann, F. Motivated Memory in Economics—A Review. Games 2023, 14, 15. https://doi.org/10.3390/g14010015
Amelio A, Zimmermann F. Motivated Memory in Economics—A Review. Games. 2023; 14(1):15. https://doi.org/10.3390/g14010015Chicago/Turabian Style
Amelio, Andrea, and Florian Zimmermann. 2023. "Motivated Memory in Economics—A Review" Games 14, no. 1: 15. https://doi.org/10.3390/g14010015