FAIR Seminar Johannes Wohlfart
We invite you to a FAIR Seminar with Johannes Wohlfart, Professor of Economics at the University of Cologne and a Cluster Faculty Member of the ECONtribute Cluster of Excellence.
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Title: Do People Have Economic Expectations?
Abstract: Expectations are central in economic models. But to what extent do individuals hold such expectations in the first place? We study whether – when thinking about an economic issue – individuals can build on previously-formed expectations. Many cannot: they must form expectations from scratch, even when close to making decisions for which the expectation should be relevant. This matters: individuals without previously-formed expectations (i) state more context-dependent expectations, (ii) update expectations more strongly but less persistently in response to new information, (iii) report expectations less relevant to decisions, and (iv) rely more on heuristics that do not require expectations when making decisions.