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Brownbag Seminars: Misinterpreting Yourself

Wednesday, May 11, 2022, 11:30 am – 12:30 pm

Abstract: We model an agent who has stubborn, unrealistic views of his present bias, racist tendencies, or other motives, and accounts for his own behavior by adjusting his beliefs about auxiliary circumstances. We identify conditions under which the agent is eventually able to predict his behavior well, yet still behaves differently from a realistic agent. This prediction confounds existing empirical attempts to determine whether a person has a sophisticated understanding of himself, and has important implications for the agent's behavior and welfare. In particular, we show that in basic situations, any incorrect self-view is self-defeating in the sense that the agent would be acting more in accordance with that self-view if he was instead realistic. We identify implications of self-defeating misperceptions for consumption with partially naive present bias, including empirically realistic addiction-like patterns, and develop novel models of implicit bias and cognitive dissonance.