WOULD YOU PAY FOR TRANSPARENTLY USELESS ADVICE? A TEST OF BOUNDARIES OF BELIEFS IN THE FOLLY OF PREDICTIONS

• 成果类型: Article
• 署名作者: Powdthavee, Nattavudh; Riyanto, Yohanes E.
• 署名单位: University of London; London School Economics & Political Science; University of Melbourne; Nanyang Technological University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00453
• 发表日期: 2015-05
• 页码: 257-272
• 关键词: hot-hand; gamblers fallacy; MARKETS; randomness

摘要

Standard economic models assume that the demand for expert predictions arises only under the conditions in which individuals are uncertain about the underlying process generating the data and there is a strong belief that past performances predict future performances. We set up the strongest possible test of these assumptions. In contrast to the theoretical suggestions made in the literature, people are willing to pay for predictions of truly random outcomes after witnessing only a short streak of accurate predictions live in the lab. We discuss potential explanations and implications of such irrational learning in the contexts of economics and finance.