Tony Q. Fan
Job Market Candidate

Stanford University
Department of Economics
579 Jane Stanford Way
Stanford, CA 94305
tonyqfan@stanford.edu


I will join the University of Alabama as an Assistant Professor of Economics in Fall 2023. Please visit my new website here for up-to-date information.

photo of Tony Q. Fan


Curriculum Vitae

Primary Fields:
Behavioral and Experimental Economics

Secondary Fields:
Household Finance, Applied Microeconomics

Expected Graduation Date:
June 2023

Dissertation Committee:

B. Douglas Bernheim (Co-primary):
bernheim@stanford.edu

Muriel Niederle (Co-primary):
niederle@stanford.edu

Matthew Gentzkow:
gentzkow@stanford.edu



Job Market Paper

The Inference-Forecast Gap in Belief Updating
(with Yucheng Liang and Cameron Peng)
Presented at SITE (Psychology and Economics & Experimental Economics), North American ESA Conference, ECBE, SABE Conference, D-TEA Workshop, NBER (Behavioral Finance), WFA, EFA, MFA, SFS Cavalcade

Individual forecasts of economic variables show widespread overreaction to recent news, but laboratory experiments on belief updating typically find underinference from new signals. We provide new experimental evidence to connect these two seemingly inconsistent phenomena. Building on a classic experimental paradigm, we study how people make inferences and revise forecasts in the same information environment. Participants underreact to signals when inferring about underlying states, but overreact to signals when revising forecasts about future outcomes. This gap in belief updating is largely driven by the use of different simplifying heuristics for the two tasks. Additional treatments suggest that the choice of heuristics is affected by the similarity between cues in the information environment and the belief updating question: when forming a posterior belief, participants are more likely to rely on cues that appear similar to the variable elicited by the question.
AEA Pre-registry Experimental Instructions


Working Papers

Motivated Mislearning: The Case of Correlation Neglect
(with Lukas Bolte)
Revise and Resubmit at the Journal of Economic Behavior and Organization

We design an experiment to study the role of motivated reasoning in correlation neglect. Participants receive potentially redundant signals about an ego-relevant state---their IQ test performance. We elicit their belief that the signals came from the same source (and thus contain redundant information). Participants generally underappreciate the extent to which identical signals are more likely to come from the same source, but the bias is significantly stronger for good (ego-favorable) signals than for bad (ego-unfavorable) signals. This asymmetric effect disappears in a control treatment where the state is ego-irrelevant. These results suggest that individuals may neglect the correlation between desirable signals to sustain motivated beliefs. However, the estimated effect is not quantitatively large enough to generate significant asymmetric updating about own IQ test performance.
AEA Registry Experimental Instructions


Forming Misspecified Mental Models: The Power of Choice
Draft under revision.

Using a novel experimental approach that directly elicits individuals' mental models, I document how choices lead individuals to adopt models that exaggerate the importance of their choice variable for payoff-relevant outcomes. Going beyond the traditional notion of the illusion of control, I emphasize how choices distort models about general causal relationships instead of beliefs about personal control. Thus, distorted models can generate spillover effects on what people "choose to choose" and how people advise others. Finally, I test for selective memory retrieval during the choice process as a potential key mechanism for the model distortions.
AEA Pre-registry


How Paternalistic Preferences Shape the Welfare State: The Case of In-Kind Nutrition Assistance
(with Sandro Ambuehl, B. Douglas Bernheim, and Zach Freitas-Groff)
Presented at Amsterdam Center for Behavioral Change Workshop, Decision-making for Others Conference, MPI Workshop on Paternalism, Swiss V-BEERS (Virtual Behavioral and Experimental Economics Research Seminar)

Poverty assistance is often administered in-kind even though cash transfers would raise recipients' welfare more effectively. We characterize the political economy constraint that paternalistic motives impose on the welfare system. In our experiment, a representative sample of U.S. citizens reveal their motives by deciding whether a real U.S. welfare recipient will receive monthly grocery deliveries over half a year, or whether the recipient will have a choice between these deliveries and monthly deliveries of cash equivalents. Respondents frequently impose restrictions. Two fifths restrict the recipient even if the cash equivalent is twice the value of the food. Only a third always let the recipient choose. Respondents restrict a significantly larger proportion of recipients than they believe, indicating that their decisions are partially misguided. A conservative political stance is associated with significantly more restrictions. Respondents' goal is not to ensure sufficient healthy nutrition, but to prevent consumption of items deemed inappropriate. While respondents reveal stereotypes in various survey questions, recipient race, gender, age, and parental status have little effect on restriction decisions, on average.
AEA Pre-registry