Ego-relevance and optimistic belief updating

Last registered on February 13, 2020
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Pre-Trial

Trial Information

General Information

Title
Ego-relevance and optimistic belief updating
RCT ID
AEARCTR-0005121
Initial registration date
January 22, 2020

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 22, 2020, 11:10 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
February 13, 2020, 5:47 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Germany
Region

Primary Investigator

Name
Christoph Drobner
Affiliation
Technical University Munich
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Other Primary Investigator(s)

PI Name
Sebastian Goerg
PI Affiliation
Technical University Munich
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Additional Trial Information

Status
In development
Start date
2020-01-31
End date
2020-06-30
Keywords
Other
Additional Keywords
Ego-relevance, optimistic belief updating, Bayes' rule, overconfidence
JEL code(s)
C91, D03, D83
Secondary IDs
Abstract
Do people process ego-relevant information about themselves in an optimistic manner? We experimentally investigate how people update their beliefs about their relative performance in an IQ-test for different levels of ego-relevance.

We implement the following experimental methodology: First, subjects perform an IQ-related test. Second, we elicit subjects' prior beliefs about their relative performance. Third, we provide subjects with polarizing information about the validity of IQ-tests. Fourth, subjects receive noisy but objective performance feedback. Fifth, we elicit subjects' posterior beliefs about their relative performance. The last two stages are repeated such that subjects receive two binary signals and report their updated beliefs twice.

The experimental design allows us to compare subjects' belief updating process to the normative benchmark of Bayes' rule for different levels of ego-relevance. By exogenously varying the perceived ego-relevance of IQ-tests, the results provide a clean test of the optimistic belief updating hypothesis, because prior beliefs are held constant across treatments. In addition, we elicit subjects' effort in the IQ-test and subjects' perceived validity of the IQ-test for study success and job success. To this end, we examine how subjects engage in ex-post rationalization of negative feedback.

External Link(s)

Registration Citation

Citation
Drobner, Christoph and Sebastian Goerg. 2020. "Ego-relevance and optimistic belief updating." AEA RCT Registry. February 13. https://doi.org/10.1257/rct.5121-2.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We test the optimistic belief updating hypothesis by exogenously varying subjects' ego-relevance of the updating task.
Intervention Start Date
2020-01-31
Intervention End Date
2020-06-30

Primary Outcomes

Primary Outcomes (end points)
Prior beliefs, posterior beliefs, signals, relevance of IQ-test for study success and job success, effort in IQ-test
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Test scores, gender, high school math grade, field of study
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We implement the following experimental methodology: First, subjects perform an IQ-related test. Second, we elicit subjects' prior beliefs about their relative performance. Third, we provide subjects with polarizing information about the validity of IQ-tests. Fourth, subjects receive noisy but objective performance feedback. Fifth, we elicit subjects' posterior beliefs about their relative performance. The last two stages are repeated such that subjects receive two binary signals and report their updated beliefs twice.

The experimental design allows us to compare subjects' belief updating process to the normative benchmark of Bayes' rule for different levels of ego-relevance. By exogenously varying the perceived ego-relevance of IQ-tests, the results provide a clean test of the optimistic belief updating hypothesis, because prior beliefs are held constant across treatments. In addition, we elicit subjects' effort in the IQ-test and subjects' perceived validity of the IQ-test for study success and job success. To this end, we examine how subjects engage in ex-post rationalization of negative feedback.
Experimental Design Details
Randomization Method
Randomization by computer
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
420
Sample size: planned number of observations
840
Sample size (or number of clusters) by treatment arms
210 in treatment High Ego
210 in treatment Low Ego
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
German Association for Experimental Economic Research e.V.
IRB Approval Date
2019-12-12
IRB Approval Number
6NNIYjoa
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials