Si Chen

The literature on motivated reasoning argues that people skew their personal beliefs so that they can feel moral when acting selfishly. We study dynamic information acquisition of decision-makers with a motive to form positive moral self-views and a motive to act selfishly. Theoretically and experimentally, we find that individuals “fish for desirable information”: they are more likely to continue (stop) acquiring information having received mostly information suggesting that acting selfishly is harmful (harmless) to others. Empirically, the tendency for this behavior is stronger among individuals with above-median cognitive ability. We discuss the resulting welfare effects. We relate our results to the literature on interpersonal Bayesian persuasion (Kamenica and Gentzkow, 2011).

The motivational value of confidence postulates that individual effort provision is increasing in beliefs on one’s own ability. This relation is supposed to also hold for overconfident individuals who have exaggerated ability beliefs. We present the first empirical evidence on the existence of a motivational value of absolute confidence that many microeconomic models with overconfident agents build on. Moreover, we document that negative debiasing information on individual ability diminishes effort provision – a result that is of obvious relevance for many contexts such as labor relations or learning at school. We also offer a strategy for identifying significant absolute overconfidence at the individual level.

In a laboratory experiment, we study the effect of acute and chronic stress on individual risk-taking behavior. We exogenously induce acute stress using the Trier Social Stress Test for Groups developed by von Dawans, Kirschbaum, and Heinrichs (2011). We measure subjects' acute stress by their heart rate, saliva cortisol levels, and their chronic stress by their hair cortisol levels. We elicit the subjects' risk-taking tendency by using randomized lottery pairs. Employing a within-subject design, i.e., eliciting each subject's risk-taking propensity both with and without the exogeneous acute stress, we aim to shed light on individuals' heterogeneous responses to acute stress in terms of risk-taking. It thereby contributes to the inconclusive literature on the causal effect of acute stress on risk-taking. It will also be among the first to study the impact of chronic stress and the interactive effect between chronic and acute stress on individual risk-taking behavior.