Place: Room 621, GP South (Building 78)
Time: Thursday 14th Sept, 10:30 morning Tea, 11:00am seminar
Title: The Effect of Confirmatory Bias on the Forming of Expectations.
Speaker: Mark Bowden, PhD Candidate, School of Economics - ACCS
People want to be right. Information which contradicts their beliefs triggers the pain of regret that they were wrong. This paper examines the impact of confirmatory bias as it modifies the way in which individuals within a small world network collect information from each other. For all but extreme levels of confirmatory bias the effect is subtle. It increases the time required for all agents to learn new information through sharing.
It also reduces short term volatility associated with agents incorrectly perceiving new information. However, when individuals suffer extreme levels of the bias long term misalignment between the majority view of agents and the correct information emerges.