Time：April 30, 2021, 13:00-14:30
Venue：Room2235, Songjiang Campus
Speaker：Associate Professor Li Jingjing , Microbank Financial Technology School, Shenzhen University and Nantes Business School, Shenzhen University
Host：Prof. Yang Xiaolan
Topic：Wishful Thinking in Macroeconomic Expectations: A Field Experiment in China
We conduct an online field experiment in China to investigate determinants of macroeconomic expectations following the Covid-19 outbreak. We investigate the effect of probability overweighting, religiosity, ambiguity aversion, and time preference. We find that subjects exhibiting probability overweighting, having higher degree of religiosity, having lower discount factor are more optimistic on economic growth and income, while ambiguity averse subjects are more pessimistic about the impact of Covid-19 outbreak on the economic growth rate. We compute the forecast errors and estimate the proportion of forecasts with rounding and implausible values. We find that significant proportion of subjects have rather poor understanding on macroeconomic variables. Subjects with higher degree of religiosity, living in small towns and villages, and with higher subjective socioeconomic status have higher forecast errors, while subjects with better education have lower forecast errors. Overall, we find that subjects form optimistic expectations, supporting the implication of belief-based utility (Brunnermeier and Parker, 2005) and wishful thinking (Seybert and Bloomfield, 2009) on macroeconomic expectations.
Associate Professor Li Jingjing
Jingjing Li, Ph.D. in Economics from Hong Kong University of Science and Technology, is currently an Associate Professor at the School of Financial Technology, Wezubank, Shenzhen University and Nantes Business School, Shenzhen University. He has worked at City University of Hong Kong (Assistant Professor), Shanghai University of Finance and Economics (Assistant Professor) and Max Planck Institute for Economic Research, Germany (Postdoctoral Fellow). His research interests include experimental economics, behavioral economics and behavioral finance. He is the first scholar to use experimental economics methods to study language and decision making, memory bias and stochastic preferences. His research has been published in Management Science, Experimental Economics, Journal of Economic Psychology, Social Choice and Welfare, Journal of Risk and Uncertainty, Journal of Economic Theory and other top journals in the field of economics and management.