Forecast uncertainty—ex Ante and ex Post: U.S. inflation and output growth

Survey respondents who make point predictions and histogram forecasts of macro-variables reveal both how uncertain they believe the future to be, ex ante, as well as their ex post performance. Macroeconomic forecasters tend to be overconfident at horizons of a year or more, but overestimate (i.e., are underconfident regarding) the uncertainty surrounding their predictions at short horizons. Ex ante uncertainty remains at a high level compared to the ex post measure as the forecast horizon shortens. There is little evidence of a link between individuals’ ex post forecast accuracy and their ex ante subjective assessments.

Anxiety and attentional bias in preschool-aged children: an eyetracking study

Extensive research has examined attentional bias for threat in anxious adults and school-aged children but it is unclear when this anxiety-related bias is first established. This study uses eyetracking technology to assess attentional bias in a sample of 83 children aged 3 or 4 years. Of these, 37 (19 female) met criteria for an anxiety disorder and 46 (30 female) did not. Gaze was recorded during a free-viewing task with angry-neutral face pairs presented for 1250 ms. There was no indication of between-group differences in threat bias, with both anxious and non-anxious groups showing vigilance for angry faces as well as longer dwell times to angry over neutral faces. Importantly, however, the anxious participants spent significantly less time looking at the faces overall, when compared to the non-anxious group. The results suggest that both anxious and non-anxious preschool-aged children preferentially attend to threat but that anxious children may be more avoidant of faces than non-anxious children.

Is it me? Self-recognition bias across sensory modalities and its relationship to autistic traits

Background Atypical self-processing is an emerging theme in autism research, suggested by lower self-reference effect in memory, and atypical neural responses to visual self-representations. Most research on physical self-processing in autism uses visual stimuli. However, the self is a multimodal construct, and therefore, it is essential to test self-recognition in other sensory modalities as well. Self-recognition in the auditory modality remains relatively unexplored and has not been tested in relation to autism and related traits. This study investigates self-recognition in auditory and visual domain in the general population and tests if it is associated with autistic traits. Methods Thirty-nine neurotypical adults participated in a two-part study. In the first session, individual participant’s voice was recorded and face was photographed and morphed respectively with voices and faces from unfamiliar identities. In the second session, participants performed a ‘self-identification’ task, classifying each morph as ‘self’ voice (or face) or an ‘other’ voice (or face). All participants also completed the Autism Spectrum Quotient (AQ). For each sensory modality, slope of the self-recognition curve was used as individual self-recognition metric. These two self-recognition metrics were tested for association between each other, and with autistic traits. Results Fifty percent ‘self’ response was reached for a higher percentage of self in the auditory domain compared to the visual domain (t = 3.142; P < 0.01). No significant correlation was noted between self-recognition bias across sensory modalities (τ = −0.165, P = 0.204). Higher recognition bias for self-voice was observed in individuals higher in autistic traits (τ AQ = 0.301, P = 0.008). No such correlation was observed between recognition bias for self-face and autistic traits (τ AQ = −0.020, P = 0.438). Conclusions Our data shows that recognition bias for physical self-representation is not related across sensory modalities. Further, individuals with higher autistic traits were better able to discriminate self from other voices, but this relation was not observed with self-face. A narrow self-other overlap in the auditory domain seen in individuals with high autistic traits could arise due to enhanced perceptual processing of auditory stimuli often observed in individuals with autism.

Shared cognition in childhood anxiety: interpretation bias in preschool children and their parents

Although interpretation bias has been associated with the development and/or maintenance of childhood anxiety, its origins remain unclear. The present study is the first to examine intergenerational transmission of this bias from parents to their preschool-aged children via the verbal information pathway. A community sample of fifty parent–child pairs was recruited. Parents completed measures of their own trait anxiety and interpretation bias, their child’s anxiety symptoms, and a written story-stem measure, to capture the way parents tell their children stories. Interpretation bias was assessed in preschool-aged children (aged between 2 years 7 months and 5 years 8 months) using an extended story-stem paradigm. Young children’s interpretation bias was not significantly associated with their own anxiety symptoms. Neither was there evidence for a significant association between parent and child interpretation bias. However, parents who reported they would tell their child one or more threatening story endings in the written story-stem task had significantly higher anxiety than those who did not include any threatening story endings. In turn, children whose parents did not include any threatening endings in their written stories had significantly lower threat interpretations on the child story-stem paradigm, compared to those with parents who included at least one threatening story ending. The results suggest that parental verbal information could play a role in the development of interpretation bias in young children.

Enhanced effects of combined cognitive bias modification and computerised cognitive behaviour therapy on social anxiety

This study examines whether combined cognitive bias modification for interpretative biases (CBM-I) and computerised cognitive behaviour therapy (C-CBT) can produce enhanced positive effects on interpretation biases and social anxiety. Forty socially anxious students were randomly assigned into two conditions, an intervention group (positive CBM-I + C-CBT) or an active control (neutral CBM-I + C-CBT). At pre-test, participants completed measures of social anxiety, interpretative bias, cognitive distortions, and social and work adjustment. They were exposed to 6 × 30 min sessions of web-based interventions including three sessions of either positive or neutral CBM-I and three sessions of C-CBT, one session per day. At post-test and two-week follow-up, participants completed the baseline measures. A combined positive CBM-I + C-CBT produced less negative interpretations of ambiguous situations than neutral CBM-I + C-CBT. The results also showed that both positive CBM-I + C-CBT and neutral CBM-I + C-CBT reduced social anxiety and cognitive distortions as well as improving work and social adjustment. However, greater effect sizes were observed in the positive CBM-I + C-CBT condition than the control. This indicates that adding positive CBM-I to C-CBT enhanced the training effects on social anxiety, cognitive distortions, and social and work adjustment compared to the neutral CBM-I + C-CBT condition.

Is cognitive bias modification training truly beneficial for adolescents?

Background Cognitive Bias Modification (CBM) has been shown to change interpretation biases commonly associated with anxiety and depression and may help ameliorate symptoms of these disorders. However, its evidence base for adolescents is scarce. Previous results have been hard to interpret because of methodological issues. In particular, many studies have used negative bias training as the control condition. This would tend to inflate any apparent benefits of CBM compared to a neutral control. Most studies also only examined the effects of a single training session and lacked follow-up assessment or ecologically valid outcome measures. Method Seventy-four adolescents, aged 16–18 years, were randomised to two sessions of CBM training or neutral control. Interpretation bias and mood were assessed three times: at baseline, immediately post-training and 1 week post-training. A controlled experimental stressor was also used, and responses to everyday stressors were recorded for 1 week after training to assess responses to psychological challenges. Feedback for the training programme was collected. Results The CBM group reported a greater reduction in negative affect than control participants. However, other hypothesised advantages of CBM were not demonstrated. Regardless of training group, participants reported increased positive interpretations, decreased negative interpretations, reduced depressive symptoms and no change in trait anxiety. The two groups did not differ in their stress reactivity. After controlling for group differences in training performance, all the mood effects disappeared. Conclusions When tested under stringent experimental conditions the effects of CBM in healthy adolescents appear to be minimal. Future studies should concentrate on participants with elevated cognitive biases and/or mood symptoms who may be more sensitive to CBM.

The transaction cost economics theory of the family firm: family-based human asset specificity and the bifurcation bias

We develop a transaction cost economics theory of the family firm, building upon the concepts of family-based asset specificity, bounded rationality, and bounded reliability. We argue that the prosperity and survival of family firms depend on the absence of a dysfunctional bifurcation bias. The bifurcation bias is an expression of bounded reliability, reflected in the de facto asymmetric treatment of family vs. nonfamily assets (especially human assets). We propose that absence of bifurcation bias is critical to fostering reliability in family business functioning. Our study ends the unproductive divide between the agency and stewardship perspectives of the family firm, which offer conflicting accounts of this firm type's functioning. We show that the predictions of the agency and stewardship perspectives can be usefully reconciled when focusing on how family firms address the bifurcation bias or fail to do so.

‘It Was All My Fault’: negative interpretation bias in depressed adolescents

The extent to which cognitive models of development and maintenance of depression apply to adolescents is largely untested, despite the widespread application of Cognitive Behavior Therapy (CBT) for depressed adolescents. Cognitive models suggest that negative cognitions, including interpretation bias, play a role in etiology and maintenance of depression. Given that cognitive development is incomplete by the teenage years and that CBT is not superior to non-cognitive treatments in the treatment of adolescent depression, it is important to test the underlying model. The primary aim of this study was to test the hypothesis that interpretation biases are exhibited by depressed adolescents. Four groups of adolescents were recruited: clinically-referred depressed (n = 27), clinically-referred non-depressed (n = 24), community with elevated depression symptoms (n = 42) and healthy community (n = 150). Participants completed a 20 item ambiguous scenarios questionnaire. Clinically-referred depressed adolescents made significantly more negative interpretations and rated scenarios as less pleasant than all other groups. The results suggest that this element of the cognitive model of depression is applicable to adolescents. Other aspects of the model should be tested so that cognitive treatment can be modified or adapted if necessary.

Threat interpretation bias in anxious children and their mothers

The role of parents in the development of anxiety disorders in children is of increasing research and clinical interest. This study investigated interpretation biases of anxious children and their mothers using the ambiguous stimuli task developed by Hadwin, Frost, French, and Richards (1997). Three groups of children (aged 7 to 12 years) and their mothers were recruited; 23 non-clinical controls, 18 children with an anxiety disorder and 15 children with an externalising disorder. Following diagnostic assessments of the children, children and their mothers independently completed the homophone task and self-report measures of anxiety. Mothers of anxious children had significantly higher self-reported anxiety than mothers of non-clinical children. As hypothesised, children in the anxious group had higher threat interpretation scores than the non-clinical group. The hypothesis that mothers of anxious children would make more threat interpretations was not supported. Paired correlations showed no significant association between threat interpretations made by children and their mothers. There was a significant positive correlation between maternal threat interpretation and child anxiety. The results suggest that there is a complex association between mother's anxiety and cognitions and those of their children, which requires further examination in controlled observational and experimental studies, including treatment trials.

Effects of a multi-session Cognitive Bias Modification program on interpretative biases and social anxiety symptoms in a sample of Iranian socially-anxious students

This study examines the effects of a multi-session Cognitive Bias Modification (CBM) program on interpretative biases and social anxiety in an Iranian sample. Thirty-six volunteers with a high score on social anxiety measures were recruited from a student population and randomly allocated into the experimental and control groups. In the experimental group, participants received 4 sessions of positive CBM for interpretative biases (CBM-I) over 2 weeks in the laboratory. Participants in the control condition completed a neutral task matched the active CBM-I intervention in format and duration but did not encourage positive disambiguation of socially ambiguous scenarios. The results indicated that after training the positive CBM-I group exhibited more positive (and less negative) interpretations of ambiguous scenarios and less social anxiety symptoms relative to the control condition at both 1 week post-test and 7 weeks follow-up. It is suggested that clinical trials are required to establish the clinical efficacy of this intervention for social anxiety.

Clinical implications of cognitive bias modification for interpretative biases in social anxiety: an integrative literature review

Cognitive theories of social anxiety indicate that negative cognitive biases play a key role in causing and maintaining social anxiety. On the basis of these cognitive theories, laboratory-based research has shown that individuals with social anxiety exhibit negative interpretation biases of ambiguous social situations. Cognitive Bias Modification for interpretative biases (CBM-I) has emerged from this basic science research to modify negative interpretative biases in social anxiety and reduce emotional vulnerability and social anxiety symptoms. However, it is not yet clear if modifying interpretation biases via CBM will have any enduring effect on social anxiety symptoms or improve social functioning. The aim of this paper is to review the relevant literature on interpretation biases in social anxiety and discuss important implications of CBM-I method for clinical practice and research.

Improved Arctic sea-ice thickness projections using bias corrected CMIP5 simulations

Projections of Arctic sea ice thickness (SIT) have the potential to inform stakeholders about accessibility to the region, but are currently rather uncertain. The latest suite of CMIP5 Global Climate Models (GCMs) produce a wide range of simulated SIT in the historical period (1979–2014) and exhibit various biases when compared with the Pan-Arctic Ice Ocean Modelling and Assimilation System (PIOMAS) sea ice reanalysis. We present a new method to constrain such GCM simulations of SIT via a statistical bias correction technique. The bias correction successfully constrains the spatial SIT distribution and temporal variability in the CMIP5 projections whilst retaining the climatic fluctuations from individual ensemble members. The bias correction acts to reduce the spread in projections of SIT and reveals the significant contributions of climate internal variability in the first half of the century and of scenario uncertainty from mid-century onwards. The projected date of ice-free conditions in the Arctic under the RCP8.5 high emission scenario occurs in the 2050s, which is a decade earlier than without the bias correction, with potentially significant implications for stakeholders in the Arctic such as the shipping industry. The bias correction methodology developed could be similarly applied to other variables to reduce spread in climate projections more generally.

Present bias predicts participation in payments for environmental services: evidence from a behavioral experiment in Uganda

Farmers are necessary agents in global efforts to conserve the environment now that croplands and pastures together constitute the largest terrestrial system on Earth – covering some 48% of ice-free land surface. Whereas standard economic models predict that farmers will participate in conservation programs so long as they are profitable, empirical findings from behavioral economics point to a number of normally unobservable preferences that may influence the decision-making process. This study tests, for the first time, whether heterogeneity in behavioral preferences correlates with decisions to participate in Payments for Environmental Services (PES) programs. We elicit individual trust and time preferences using economic experiments and link resulting measures to household survey data and participation decisions in a Ugandan PES program. We find that farmers who exhibit a preference for proximate gains – present-biased preferences – are 47.7% more likely to participate in the program than those who show time-consistent or future-biased preferences. This result has implications for ongoing and planned PES programs involving farmers, particularly in Africa, by highlighting a potential relationship between payment timing and participation, and further validates the use of behavioral experiments in explaining real-world decisions.

Can institutional investors bias real estate portfolio appraisals? Evidence from the market downturn

This paper investigates the extent to which institutional investors may have influenced independent real estate appraisals during the financial crisis. A conceptual model of the determinants of client influence on real estate appraisals is proposed. It is suggested that the extent of clients’ ability and willingness to bias appraisal outputs is contingent upon market and regulatory environments (ethical norms and legal and institutional frameworks), the salience of the appraisal(s) to the client, financial incentives for the appraiser to respond to client pressure, organisational culture, the level of moral reasoning of both individual clients and appraisers, client knowledge and the degree of appraisal uncertainty. The potential of client influence to bias ostensibly independent real estate appraisals is examined using the opportunity afforded by the market downturn commencing in 2007 in the UK. During the market turbulence at the end of 2007, the motivations of different types of owners to bias appraisals diverged clearly and temporarily provided a unique opportunity to assess potential appraisal bias. We use appraisal-based performance data for individual real estate assets to test whether there were significant ownership effects on performance during this period. The results support the hypothesis that real estate appraisals in this period reflected the differing needs of clients.

The ratio bias phenomenon: fact or artifact?

The ratio bias—according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers—has recently gained momentum, with researchers especially in health economics emphasizing the policy importance of the phenomenon. Although the bias has been replicated several times, some doubts remain about its economic significance. Our two experiments show that the bias disappears once order effects are excluded, and once salient and dominant incentives are provided. This holds true for both choice and valuation tasks. Also, adding context to the decision problem does not alter this finding. No ratio bias could be found in between-subject tests either, which leads us to the conclusion that the policy relevance of the phenomenon is doubtful at best.