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Faculty of Economics

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Goette, L., Han, H. J. and Leung, B. T. K.

Information Overload and Confirmation Bias

CWPE2019

Abstract: We show that information overload contributes to confirmation bias. In an experiment, we vary the difficulty of information processing as subjects receive a sequence of signals of an unknown state. In the treatment condition, the preceding signal disappears as the next signal appears. In the control condition, the preceding signal remains visible. We find stronger confirmation bias among subjects in the treatment condition. Our results provide empirical support for models that emphasize the role of limited information processing in confirmation bias (Wilson (2014), Leung (2018), Jehiel and Steiner (2018)).

Keywords: information overload, belief formation, confirmation bias

JEL Codes: D83 D91

Author links: Benson Tsz Kin Leung  

PDF: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2019.pdf

Open Access Link: https://doi.org/10.17863/CAM.52487