Working Papers

People misperceive future valuations through projection. These misperceptions matter for intertemporal choice and affect inferences about time preferences.

This paper presents experimental and survey evidence that projective misperceptions—the tendency to project one’s current valuations or states onto the future—generate behavior that can be systematically misattributed to time preferences. In a real-effort experiment, individuals’ intertemporal choice is driven primarily by the projection of randomized decision states rather than by time discounting. This observed state dependence leads to up to 44 percent variation in time preference estimates, but can be remedied by experience-based learning. These findings imply that time preference estimates are inherently variable and context-dependent, and have implications for misperception-based policy design to address apparent self-control problems.

Consumers prefer sellers who support consumers' values. Sellers anticipate this, and they respond by expressing support for these values but only when there are potential gains from trade.

We study consumers' concerns for the ideological values of their market counterparts and the implications of such concerns for the public promotion of values. Using a survey and online and laboratory experiments, we find that consumers are willing to pay premiums to exchange with counterparts who demonstrate support for their values. When sellers anticipate the possibility of market exchange, they exhibit public support for consumers’ values. Our findings challenge notions that market exchange is impersonal, suggest that public value positions can provide a dimension of firm differentiation, and provide evidence that market exchange can influence public support for ideological values.

People are influenced by biased narratives, even when they know the bias and the random assignment of those biased narratives. More information does not help because perceptions are also affected.

Can people counteract biased narratives—the qualitative interpretation of objective facts or events—through subsequent information acquisition? Using an online experiment, we investigate this question by first randomly assigning participants to read different narratives that contain the same facts, and then offering them the opportunity to acquire balanced arguments. We document three main findings. First, participants shift their attitudes towards the standpoint of the randomly assigned narrative, knowing that the narrative is biased and randomly assigned. Second, the opportunity to read additional arguments does not prompt participants to adjust their attitudes shaped by the initial narrative. Third, when evaluating subsequent arguments, participants find arguments aligned with the randomly assigned narrative more convincing, which likely contributes to their inability to counteract biased narratives. Taken together, our results demonstrate a persistent effect of biased narratives and highlight the importance of balanced exposure at the outset.