Anticipatory Anxiety and Wishful Thinking
Tinbergen Institute Discussion Paper 2019-042/I
32 Pages Posted: 26 Jun 2019
Date Written: June 17, 2019
Abstract
It is widely hypothesized that anxiety and worry about an uncertain future lead to the adoption of comforting beliefs or "wishful thinking". However, there is little direct causal evidence for this effect. In our experiment, participants perform a visual pattern recognition task where some patterns may result in the delivery of an electric shock, a proven way of inducing anxiety. Participants engage in significant wishful thinking, as they are less likely to correctly identify patterns that they know may lead to a shock. Greater ambiguity of the pattern facilitates wishful thinking. Raising incentives for accuracy does not significantly decrease it.
Keywords: confidence, beliefs, anticipatory utility, anxiety, motivated cognition
JEL Classification: D83, C91
Suggested Citation: Suggested Citation