Research and Teaching Fields
Primary: Behavioral Economics, Experimental Economics
Secondary: Microeconomic Theory
Email: martkozakiewicz [at] gmail [dot] com
Job Market Paper
People tend to overestimate their abilities and chances of success, even though inaccurate beliefs lead to costly mistakes. How can these beliefs persist in an environment with frequent feedback? I propose a new test of the hypothesis that people interpret favorable feedback to be more informative. Using experimental data, I provide the first causal evidence that the utility from beliefs affects one's perception of signal informativeness. To establish causality, I adopt a matching estimator approach and construct a counterfactual outcome of a subject who observes the same signal, but the signal is not affecting his belief-based utility. I find a strong and significant effect: subjects interpret favorable signals to be more informative due to changes in belief-based utility. The results cast a new light on the origins of overconfidence and illuminate mechanisms that perpetuate it in the face of feedback.
We test experimentally the theory of misguided learning formulated by Heidhues et al. (2018). The model predicts the behavior of an agent who has a biased perception of his ability and is learning about an unknown, decision-relevant parameter. We use a novel experimental design to demonstrate that the learning process of an overconfident agent differs significantly from that of an unbiased agent. In a dynamic setting, the overconfident agent repeatedly takes suboptimal actions, misinterprets the output and forms erroneous beliefs about the unknown parameter. We provide the first empirical evidence that giving a biased agent the opportunity to experiment and acquire new information is not only ineffective, but in some cases counterproductive.
Work in Progress
Does the world get crazier or is it just me? Learning about ability and an external parameter
Estimating Belief-Based Utility Using Experimental Data