Beliefs are a central determinant of behavior. Recent models assume that beliefs about or the anticipation of future … consumption have direct utility-consequences. This gives rise to informational preferences, i.e., preferences over the timing and …, however, is not uniform but depends on context. When the environment allows subjects to not focus attention on (negative …

Many studies document failures of expected utility’s key assumption, the independence axiom. Here, we show that … revealed preference experiment, and without making any parametric assumptions, we show that 1/3 of participants belong in the …

which the available options differ more. We test this assumption in a controlled experiment where such biases will generate …

people neglect correlations in the updating process, leading to systematically "overshooting" beliefs. This finding lends …

and treat correlated information as independent. In consequence, people s beliefs are excessively sensitive to well …-conncected information sources, implying a pattern of overshooting beliefs. Additionally, in an experimental asset market, correlation …

and treat correlated information as independent. In consequence, people's beliefs are excessively sensitive to well …-connected information sources, implying a pattern of "overshooting" beliefs. Additionally, in an experimental asset market, correlation …

This paper considers a model of reference-dependent utility in which the individual makes a conscious choice of her … reference point for future consumption. The model incorporates the combination of loss aversion and anticipatory utility as … competing forces in the determination of the optimal reference point: anticipating better outcomes boosts current utility but …

prompted to abandon her prior. However, potential posteriors may induce her to take actions that generate a lower utility in … posteriors lead to larger utility than the prior. In choosing her belief, the agent optimally trades off these psychological …