More intelligent individuals have a higher tendency to fish for good news

Si Chen & Carl Heese, 2021. "Fishing for Good News: Motivated Information Acquisition," CRC TR 224 Discussion Paper Series crctr224_2021_223v3, University of Bonn and University of Mannheim. https://ideas.repec.org/p/bon/boncrc/crctr224_2021_223v3.html

Abstract: The literature on motivated reasoning argues that people skew their beliefs to feel moral when acting selfishly. We study information acquisition of decision-makers with a motive to form positive moral self-views and a motive to act selfishly. Theoretically and experimentally, we find that a motive to act selfishly makes individuals 'fish for good news': they are more likely to continue (stop) acquiring information, having received mostly information suggesting that acting selfishly is harmful (harmless) to others. We find that fishing for good news may improve social welfare. Finally, more intelligent individuals have a higher tendency to fish for good news.

5 Concluding remarks

Theoretically and experimentally, this paper analyzes the effect of the trade-off between a motive to feel moral and a competing egoistic motive on individuals’ information acquisition strategies. Two features of our study stand out relative to the existing literature. First, we consider environments with rich information sources. This ensures that the predicted and the observed information choices are not confounded by exogenous limitations imposed by the study. Theoretically, it means that we characterize the globally optimal information acquisition strategy. Empirically, it allows us to observe uncensored data on the individuals’ information strategies and uncover novel phenomena. Second, we consider a baseline in which the egoistic motive is removed from the decision. Comparing this baseline with the scenario with an egoistic motive, we can study the causal effects of the trade-off between competing motives. Three main findings emerge: first, having competing motives makes individuals fish for good news. Specifically, individuals are more likely to continue acquiring information after receiving information suggesting negative externalities of a selfish decision (‘bad news’). Reversely, after receiving information indicating no harm (‘good news’), individuals are more likely to stop. Second, theoretically, fishing for good news may improve social welfare. This prediction is supported by our data. Finally, the tendency to fish for good news is stronger among individuals with above-median cognitive ability— evidence that fishing for good news is more likely a strategic behaviour than a result of cognitive limitations. The paper opens up directions of future research. The key feature of our setting is that the decision-maker has two competing motives—one urging the individual to choose a particular action, and the other urging her to act upon her belief about an unknown state. Such a trade-off is present in many economic contexts beyond moral decisions. Imagine a food lover presented with a delicious new dish. While she longs for the dish, she also wants to believe that the food that she consumes is healthy. How would she inquire about the 40 nutrition facts of the food? Similar trade-offs arise for example in smoking and workout decisions.32 Besides, it might be interesting to investigate information acquisition strategies in field settings where morality and egoism might clash. Last, the theoretical model can be used to study other questions about individuals’ information preferences—a recently active area of empirical research.33 For example, one may analyze preferences over information skewness in settings where individuals have two competing motives.