modern behavioral economics. This chapter reviews theory and evidence on this topic, with the goal of facilitating more … systematic study of belief biases and their integration into economics. The chapter discusses biases in beliefs about random … processes, biases in belief updating, the representativeness heuristic as a possible unifying theory, and interactions between …

, subjects play the game twice and we vary the payoff between different options, and their probability beliefs are elicited. We … experimentally test three competing theories of GF and HHF: probability bias, randomized choice, and bounded rationality. We find … the classical method suggests about 51% (48%). We show that probability bias, randomized choice, and bounded rationality …

evidence that people overweight 'good news' relative to 'bad news' when updating ego-relevant beliefs. In this paper, we … in this domain. In contrast, the average participant in our experiment is strikingly close to Bayesian in her belief …