A01
Heterogeneity of Expectations and Preferences and their Joint Impact on Individual Choices
Summary

Project summary

Intertemporal decisions, e.g., with respect to education, health, and finances depend on individuals’ preferences as well as on their subjective expectations. Beliefs and preferences are not only heterogeneous across individuals, but frequently also systematically biased, leading to sub-optimal decisions. Using representative surveys and laboratory experiments, project A01 studies whether such belief and preference biases are correlated at the individual level. It develops elicitation tasks that explicitly allow for such correlations, and – to the extent they exist – explores their consequences for choice outcomes with the aim to develop de-biasing interventions.