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Games
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Economics of Motivated Beliefs
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Economics of Motivated Beliefs

A special issue of Games (ISSN 2073-4336). This special issue belongs to the section "Behavioral and Experimental Game Theory".

Deadline for manuscript submissions: 30 April 2024 | Viewed by 9670

Special Issue Editor

Dr. Xiaojian Zhao

E-Mail Website
Guest Editor
Department of Economics, Monash Business School, Monash University, VIC, Australia
Interests: economics of motivated beliefs; behavioral and experimental economics; contract theory; applied microeconomics

Special Issue Information

Dear Colleagues,

People tend to hold a positive self-view or a rosy world-view, by processing information in a biased way. The economics of motivated beliefs has been growing very fast in the past decades, producing new insights in psychology and economics. In this area, researchers aim to answer the question of why and how individuals are cognitively “irrational” in the literature of behavioral economics. This Special Issue of Games is devoted to the economic analysis of motivated beliefs by applying - but not limited to - game theory, or experimental/empirical approaches. We welcome authors with research of this topic to submit their manuscripts to this Special Issue of Games.

Dr. Xiaojian Zhao
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Games is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • motivated beliefs
  • behavioral economics
  • experimental economics
  • cognitive psychology
  • awareness

Published Papers (4 papers)

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Research

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24 pages, 487 KiB  
Article
Strategic Information Suppression in Borrowing and Pre-Lending Cognition: Theory and Evidence
by Zhongwen Chen and Xiaojian Zhao
Games 2023, 14(3), 43; https://doi.org/10.3390/g14030043 - 24 May 2023
Cited by 1 | Viewed by 1169
Abstract
This paper theoretically studies the interaction between an informed borrower and an uninformed lender facing possible default of a loan application. The lender is motivated to invest cognitive resources before making a lending decision. If the regulatory fine is weak, it is impossible [...] Read more.
This paper theoretically studies the interaction between an informed borrower and an uninformed lender facing possible default of a loan application. The lender is motivated to invest cognitive resources before making a lending decision. If the regulatory fine is weak, it is impossible for a bad-debt borrower to fully disclose his situation in the application. In this case, when the likelihood of a bad debt is low, the borrower always claims that nothing in the application is wrong. Otherwise, the borrower randomizes between full disclosure and information suppression. The transaction cost of the lender’s pre-lending cognition increases with the default probability, as the default probability is small and decreases thereafter. Evidence from a peer-to-peer lending platform with 816,274 observations between 2012 and 2015 in the United States is largely consistent with our model implications. Full article
(This article belongs to the Special Issue Economics of Motivated Beliefs)
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15 pages, 291 KiB  
Article
Misperception and Cognition in Markets
by Benjamin Young
Games 2022, 13(6), 71; https://doi.org/10.3390/g13060071 - 28 Oct 2022
Cited by 2 | Viewed by 1272
Abstract
We consider a market setting where a consumer holds either a naive or sophisticated perception of their preference over products. We introduce the concept of a cognitive equilibrium, in which the consumer can transition between the cognitive states of naiveté and sophistication depending [...] Read more.
We consider a market setting where a consumer holds either a naive or sophisticated perception of their preference over products. We introduce the concept of a cognitive equilibrium, in which the consumer can transition between the cognitive states of naiveté and sophistication depending on the degree of exploitation in the market. We compare market outcomes under monopoly and competition. While competition unambiguously improves market outcomes when the consumer’s cognitive state is exogenous, it can strictly lower gains from trade when cognitive states are endogenously determined. Full article
(This article belongs to the Special Issue Economics of Motivated Beliefs)
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15 pages, 937 KiB  
Article
Memory Recall Bias of Overconfident and Underconfident Individuals after Feedback
by King-King Li
Games 2022, 13(3), 41; https://doi.org/10.3390/g13030041 - 23 May 2022
Cited by 1 | Viewed by 2957
Abstract
We experimentally investigate the memory recall bias of overconfident (underconfident) individuals after receiving feedback on their overconfidence (underconfidence). Our study differs from the literature by identifying the recall pattern conditional on subjects’ overconfidence/underconfidence. We obtain the following results. First, overconfident (underconfident) subjects exhibit [...] Read more.
We experimentally investigate the memory recall bias of overconfident (underconfident) individuals after receiving feedback on their overconfidence (underconfidence). Our study differs from the literature by identifying the recall pattern conditional on subjects’ overconfidence/underconfidence. We obtain the following results. First, overconfident (underconfident) subjects exhibit overconfident (underconfident) recall despite receiving feedback on their overconfidence (underconfidence). Second, awareness of one’s overconfidence or underconfidence does not eliminate memory recall bias. Third, the primacy effect is stronger than the recency effect. Overall, our results suggest that memory recall bias is mainly due to motivated beliefs of sophisticated decision makers rather than naïve decision-making. Full article
(This article belongs to the Special Issue Economics of Motivated Beliefs)
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Review

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15 pages, 317 KiB  
Review
Motivated Memory in Economics—A Review
by Andrea Amelio and Florian Zimmermann
Games 2023, 14(1), 15; https://doi.org/10.3390/g14010015 - 31 Jan 2023
Cited by 3 | Viewed by 2313
Abstract
Motivated reasoning refers to the idea that people hold certain beliefs about themselves or the world due to their desire to do so, rather than striving for accuracy. This type of belief formation can lead to overconfidence and polarization, as well as facilitate [...] Read more.
Motivated reasoning refers to the idea that people hold certain beliefs about themselves or the world due to their desire to do so, rather than striving for accuracy. This type of belief formation can lead to overconfidence and polarization, as well as facilitate immoral behavior at both the individual and collective levels. One of the supply-side mechanisms for motivated reasoning is motivated memory, or the selective retrieval of past experiences or information based on self-serving criteria. In this article, we review the still young economics literature on motivated memory. Summarizing both theoretical and empirical work, we highlight the key results this literature has produced. We also discuss open questions and potentially exciting avenues for future research in this area. Full article
(This article belongs to the Special Issue Economics of Motivated Beliefs)
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