Wishful Thinking is Risky Thinking
Fuente:
arXiv
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| Auteurs principaux: | , |
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| Format: | Preprint |
| Publié: |
2023
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| _version_ | 1866929232179888128 |
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| author | Burgh, Jarrod Melo, Emerson |
| author_facet | Burgh, Jarrod Melo, Emerson |
| contents | We develop a model of wishful thinking that incorporates the costs and benefits of biased beliefs. We establish the connection between distorted beliefs and risk, revealing how wishful thinking can be understood in terms of risk measures. Our model accommodates extreme beliefs, allowing wishful-thinking decision-makers to assign zero probability to undesirable states and positive probability to otherwise impossible states. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2307_02422 |
| institution | arXiv |
| publishDate | 2023 |
| record_format | arxiv |
| spellingShingle | Wishful Thinking is Risky Thinking Burgh, Jarrod Melo, Emerson Theoretical Economics We develop a model of wishful thinking that incorporates the costs and benefits of biased beliefs. We establish the connection between distorted beliefs and risk, revealing how wishful thinking can be understood in terms of risk measures. Our model accommodates extreme beliefs, allowing wishful-thinking decision-makers to assign zero probability to undesirable states and positive probability to otherwise impossible states. |
| title | Wishful Thinking is Risky Thinking |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2307.02422 |