NBER Working Paper No. 26595
In three sets of experiments involving over 4,200 subjects, we show that agents motivated to be selfish make systematic decision errors of the kind generally attributed to cognitive limitations or behavioral biases. We show that these decision errors are eliminated (or dramatically reduced) when self-serving motives are removed. We say that individuals make "motivated errors." They make decision errors, but only when it is self-serving to do so.
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Document Object Identifier (DOI): 10.3386/w26595