Cognition, optimism and the formation of age-dependent survival beliefs


Grevenbrock, Nils ; Groneck, Max ; Ludwig, Alexander ; Zimper, Alexander


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URL: https://ub-madoc.bib.uni-mannheim.de/44855
URN: urn:nbn:de:bsz:180-madoc-448551
Document Type: Working paper
Year of publication: 2018
The title of a journal, publication series: ZEW Discussion Papers
Volume: 18-015
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D12 , D83 , I10,
Keywords (English): Subjective survival beliefs , probability weighting function , confirmatory bias , cognition , optimism
Abstract: This paper investigates the roles psychological biases play in empirically estimated deviations between subjective survival beliefs (SSBs) and objective survival probabilities (OSPs). We model deviations between SSBs and OSPs through age-dependent inverse S-shaped probability weighting functions (PWFs), as documented in experimental prospect theory. Our estimates suggest that the implied measures for cognitive weakness, likelihood insensitivity, and those for motivational biases, relative pessimism, increase with age. We document that direct measures of cognitive weakness and motivational attitudes share these trends. Our regression analyses confirm that these factors play strong quantitative roles in the formation of subjective survival beliefs. In particular, cognitive weakness is an increasingly important contributor to the overestimation of survival chances in old age.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Grevenbrock, Nils ; Groneck, Max ; Ludwig, Alexander ; Zimper, Alexander (2018) Cognition, optimism and the formation of age-dependent survival beliefs. Open Access ZEW Discussion Papers Mannheim 18-015 [Working paper]
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