This review presents an approach to modeling decision making under misspecified
subjective models. The approach is based on the idea that decision makers impose …

We provide evidence on narratives about the macroeconomy-the stories people tell to
explain macroeconomic phenomena-in the context of a historic surge in inflation. In surveys …

We examine how many and what kind of firms ultimately rely on foreign inputs, sell to foreign
markets, and are affected by trade shocks. To capture that firms can trade indirectly by …

We formalize the argument that political disagreements can be traced to a “clash of
narratives.” Drawing on the “Bayesian Networks” literature, we represent a narrative by a …

Many information structures generate correlated rather than mutually independent signals,
the news media being a prime example. This article provides experimental evidence that …

Copious laboratory and some field evidence suggests that people err in predicting others'
behavior, learning from others' actions, and best responding to their beliefs. Some of these …

We develop an equilibrium framework that relaxes the standard assumption that people
have a correctly specified view of their environment. Each player is characterized by a …

News reports and communication are inherently constrained by space, time, and attention.
As a result, news sources often condition the decision of whether to share a piece of …

We explore the learning process and behavior of an individual with unrealistically high
expectations (overconfidence) when outcomes also depend on an external fundamental that …

We experimentally study how people form predictive models of simple data generating
processes (DGPs), by showing subjects data sets and asking them to predict future outputs …