Tuesday, January 31, 2017
This paper experimentally studies the cognitive strategies and mental frames people employ in contexts that require learning from absence and non-occurrence, such as when local information samples are subject to a selection problem. Through a purposefully simple and transparent belief updating experiment, I show that many people fail to take into account things they do not see. While psychologists routinely attribute cognitive biases to quick and mathematically effortless mental procedures, neglect in this context reflects deliberate and confidently executed calculations. The paper provides causal evidence that neglect rather arises because environmental complexity induces a particular narrow mental frame: when people are sufficiently cognitively busy with processing the visible aspect of the updating problem, they do not even notice or think about selection. Only once subjects’ attention is exogenously drawn to what they do not see, do participants develop adequate beliefs. Thus, environmental complexity shapes mental frames and hence generates neglect despite deliberate and effortful mathematical reasoning.