Motivated Beliefs about Others' Preferences

We study whether individuals form motivated beliefs about others' preferences when such beliefs can rationalise self-interested behaviour. In an online experiment, participants report their own willingness to work (WTW) on real-effort tasks and predict a counterpart's WTW. Participants are randomly assigned to a role (Employer or Worker) and an incentive condition (Low or High). Employers make a payoff-relevant decision about how many tasks to assign their counterpart, while Workers act as pure predictors with no such stake. We test whether Employers report higher beliefs about a counterpart's WTW than Workers, and whether stronger incentives to assign tasks widen this gap. Using higher-order beliefs, we further examine whether individuals anticipate motivated reasoning in others, and whether those who reason in a motivated way are aware of their own distortion.