American Economic Review Vol. 114 No. 4 2024

Anticipatory Anxiety and Wishful Thinking

Jan B. Engelmann¹; Maël Lebreton²; Nahuel Salem-Garcia³; Peter Schwardmann⁴; Joël J. van der Weele¹

¹ University of Amsterdam, Tinbergen Institute (email: ) · ² Paris School of Economics (email: ) · ³ University of Geneva (email: ) · ⁴ Carnegie Mellon University (email: )

Abstract

Across five experiments (N = 1,714), we test whether people engage in wishful thinking to alleviate anxiety about adverse future outcomes. Participants perform pattern recognition tasks in which some patterns may result in an electric shock or a monetary loss. Diagnostic of wishful thinking, participants are less likely to correctly identify patterns that are associated with a shock or loss. Wishful thinking is more pronounced under more ambiguous signals and only reduced by higher accuracy incentives when participants’ cognitive effort reduces ambiguity. Wishful thinking disappears in the domain of monetary gains, indicating that negative emotions are important drivers of the phenomenon.

DOI

10.1257/aer.20191068

Volume

114

Issue

4

Pages

926-960

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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