Expectation Formation Under Uninformative Signals

• 成果类型: Article
• 署名作者: Kieren, Pascal; Weber, Martin
• 署名单位: Ruprecht Karls University Heidelberg; University of Mannheim; Centre for Economic Policy Research - UK
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.03367
• 发表日期: 2025
• 关键词: Belief formation; Information processing; uninformative signals; Bayes' theorem

摘要

How do individuals process nondiagnostic information? According to Bayes' theorem, signals that do not carry relevant information are treated as if no signal occurred. This paper provides evidence that individuals update their expectations even after observing uninformative signals. Importantly, the direction in which they update depends on the valence of the signal. Prior beliefs become more optimistic after desirable uninformative signals and more pessimistic after undesirable uninformative signals. Our results provide novel insights why individuals form and entertain false beliefs in environments in which potentially new information is easily accessible but costly to verify (e.g., online media).