Abstract
It is widely hypothesized that anxiety about adverse future outcomes motivates people to adopt comforting beliefs or to engage in wishful thinking. However, there is little direct causal evidence for this effect. In a first experiment, participants perform a visual pattern recognition task where some patterns may result in the delivery of an electric shock, a proven way of inducing anxiety. Participants engage in significant wishful thinking: they are less likely to
correctly identify patterns that they know may lead to a shock. A second and third experiment establish that participants also engage in wishful thinking in anticipation of monetary losses and that the phenomenon is robust to another perceptual task, which draws on different cognitive processes. Across our three experiments, greater ambiguity of the visual evidence is associated with more wishful thinking and raising incentives for accuracy does not decrease it. Our within-subject design allows us to detect wishful thinking at the individual level. We find that wishful thinking is heterogeneous across and stable within individuals.
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