We develop a model in which an overconfident agent learns about groups in society from observations of his and others' successes. In our model, both the agent's information and his beliefs are multi-dimensional, allowing us to study interactions between different views. Overall, society always...

Recent survey evidence suggests that investors form beliefs about future stock returns by predominantly extrapolating their own experience: They overweight returns they have personally experienced while underweighting returns from earlier years and consequently expect high (low) stock market...