Workshop on Belief Formation and Prediction

Organizers: Andrei Shleifer and Robin Greenwood

Host: Behavioral Finance and Financial Stability Project at Harvard Business School

Ruth Mulan Chu Chao Center, Room 120


8:00 am Continental Breakfast and Arrival

8:30-10:15 Session 1: Finance

Chair: Robin Greenwood

Speakers: Nicholas Barberis, Erik Stafford, and Nicola Gennaioli

It is becoming increasingly clear that beliefs are central to asset price determination, and that beliefs are very different from rational expectations.   How can we get research in psychology, neuroscience, cognitive science to bear on our study of financial markets?


10:15-10:45 Break

10:45-12:30 Session 2: Memory and Attention

Chair: Andrei Shleifer

Speakers: Nick Chater, Michael Kahana, George Loewenstein

Memory and attention are probably the two main mechanisms of how we filter and use information from both external and internal worlds to come up with a representation of reality, and thus to make predictions/forecasts.  What do we know about how these two mechanisms work selectively to explain our representation of the world?  What things do and do not get recalled in response to a stimulus?  What are the systematic biases in prediction/forecast driven by these mechanisms?   Why are predictions often so stochastic? 


12:30-1:45 Lunch


1:45-3:30 Session 3: Decision Making by Machines and Humans

Chair: Sendhil Mullainathan

Speakers: Colin Camerer, Josh Tenenbaum, Jon Kleinberg

What do we know about which decisions (presumably involving prediction), people make well and which they make poorly?  Are we headed toward some integrated view of human decision making which can explain what we are good at, and what we are bad at? When do we expect inference to be roughly accurate, and when biased? Can machine learning tell us what people screw up as compared to algorithms?


3:30 Closing Reception