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Related Experiment Video

Updated: Mar 3, 2026

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies
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Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies

Published on: May 9, 2019

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Experts' ability to predict the future fosters unwarranted optimistic expectations.

Massimiliano Ostinelli1, Andrea Bonezzi2

  • 1Department of Marketing, College of Business, Florida Atlantic University.

Journal of Experimental Psychology. Applied
|March 2, 2026
PubMed
Summary

Knowing experts are accurate can create unfounded optimism about stock value, leading to increased investment. This belief in expert predictive power, even when predictions are secret, influences consumer financial decisions.

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Last Updated: Mar 3, 2026

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies
05:22

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies

Published on: May 9, 2019

5.8K

Area of Science:

  • Behavioral Economics
  • Consumer Psychology
  • Decision Science

Background:

  • Consumers often rely on expert predictions for financial decisions.
  • The perceived accuracy of experts can influence expectations and investment behavior.

Purpose of the Study:

  • To investigate how the mere belief in experts' predictive accuracy influences consumer expectations and investment decisions regarding asset value.
  • To explore the psychological mechanisms, such as the community of knowledge, underlying this bias.

Main Methods:

  • Experimental manipulation of perceived expert accuracy.
  • Focus on consumer expectations and investment in stock value predictions.
  • Drawing on the concept of the community of knowledge.

Main Results:

  • The belief that experts possess higher predictive accuracy (vs. lower) leads to unfounded optimistic expectations about future stock value.
  • Consumers invest more in stocks when they believe experts are highly accurate, even if specific predictions are undisclosed.
  • This bias is linked to a sense of empowerment reducing perceived risk.

Conclusions:

  • Awareness of expert accuracy, not the predictions themselves, can create biased financial expectations.
  • Unfounded optimism about asset value may lead to detrimental investment choices for consumers.
  • Understanding this bias is crucial for financial literacy and safeguarding personal finances and social welfare.