Research seminar: Florian Zimmermann (University of Bonn)

Title: "Associative Memory and Belief Formation"

  • Data: 15 giugno 2021 dalle 12:00 alle 13:15

  • Luogo: Microsoft Teams

Abstract

Information is often embedded in memorable contexts, which may cue the asymmetric recall of similar past news through associative memory. Yet, direct evidence on the role of associations for belief formation and resulting choices is scarce. We design a simple theory-driven experiment, in which participants observe sequences of signals about hypothetical companies. Here, identical signal realizations are communicated with identical contexts: stories and images. Because participants predominantly remember those past signals that get cued by the current context, expectations and willingness-to-pay strongly overreact to recent news. Investigating comparative statics and limits of the role of associative memory, we find support for the model’s predictions about how overreaction depends on the signal history; the correlation between signals and contexts; and the experimentally-induced scope for forgetting and associative memory. In model estimations, we quantify a large role of associative recall, and identify the conditions under which associations improve or worsen decision-making.

Invited by: Research seminar Team

Local Organizer: Alessandro Tavoni

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