Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2021:12: Motivated Risk Assessments

Marco Islam ()
Additional contact information
Marco Islam: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: Do people form risk assessments to justify their actions? I investigate this question in a field experiment studying the dynamics of risk assessments for visiting a cafe during the COVID-19 pandemic. Randomly varying the incentive for a visit, I find that subjects with a high incentive visit cafes more often and downplay the risk compared with subjects with a low incentive. Importantly, the downplaying happens in anticipation of the visit and without new information, suggesting that the assessment update justifies engagement in risky behavior. This finding is inconsistent with Bayesian updating but consistent with the notion of motivated reasoning.

Keywords: Risk Assessment; Motivated Reasoning; Self-Deception; Field Experiment

JEL-codes: C93; D03; D91

Language: English

85 pages, First version: October 28, 2021. Revised: July 26, 2022.

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