Motivated Errors

Myriad environments allow for the possibility of confusion. Agents may appeal to such confusion—or the possibility of making an honest mistake—to justify their behavior. In three sets of experiments involving thousands of subjects, we document evidence of such motivated errors. We document this evidence in a simple environment in which the scope for errors is small and in more complex environments in which subjects display correlation neglect and an anchoring bias. (JEL C91, D12, D64, D81, D83, D91)