Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 8, 2023 erstellt
Beschreibung:
In tension with the standard assumption that individuals understand how to act on their beliefs about economic quantities, research measuring subjective beliefs has found that the relationship between beliefs and behavior is often quantitatively weak and that correcting beliefs often fails to meaningfully change behavior. This paper assesses one explanation for these findings: that individuals may be uncertain over how to incorporate beliefs about a quantity into their decision making. I develop a theoretical framework demonstrating how uncertainty over the belief-action map attenuates the relationship between beliefs and actions, weakens behavioral responses to information, and reduces incentives to learn about the quantity. In an experiment, I test these predictions by eliciting subjects’ uncertainty over the belief-action map and experimentally manipulating this uncertainty. I find support for all three predictions: uncertainty over the belief action map attenuates the relationship between return expectations and portfolio allocations, weakens the behavioral response to information about returns, and reduces demand for this information