How do people form expectations about the future? We use amateur and expert investors' expectations about financial asset prices to study this question. Three experiments contrast the rational expectations assumption from neoclassical economics (investors forecast according to neoclassical financial theory) against two psychological theories of expectation formation—behaviorally informed expectations (investors understand empirical market anomalies and expect these anomalies to occur) and narrative expectations (investors use narrative thinking to predict future prices). Whereas neoclassical financial theory maintains that past public information cannot be used to predict future prices, participants used company performance information revealed before a base price quotation to project future price trends after that quotation (Experiment 1), contradicting rational expectations. Importantly, these projections were stronger when information concerned predictions about a company's future performance rather than actual data about its past performance, suggesting that people not only rely on financially irrelevant (but narratively relevant) information for making predictions but erroneously impose temporal order on that information. These biased predictions had downstream consequences for asset allocation choices (Experiment 2), and these choices were driven in part by affective reactions to the company performance news (Experiment 3). There were some mild effects of expertise, but overall the effects of narrative appear to be consistent across all levels of expertise studied, including professional financial analysts. We conclude by discussing the prospects for a narrative theory of choice that provide new microfoundational insights about economic behavior.

中文翻译：

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财务预测中的叙事预期

人们如何形成对未来的期望？我们使用业余和专家投资者对金融资产价格的预期来研究这个问题。三个实验将新古典经济学的理性预期假设（投资者根据新古典金融理论进行预测）与预期形成的两种心理学理论——行为知情预期（投资者了解经验性市场异常并预期这些异常会发生）和叙事预期（投资者使用叙事思考预测未来价格）。新古典金融理论认为过去的公开信息不能用来预测未来的价格，而参与者使用的是披露的公司业绩信息前一个基准价格报价，用于预测该报价之后的未来价格趋势（实验 1），与理性预期相矛盾。重要的是，当信息涉及对公司未来业绩的预测而不是有关其过去业绩的实际数据时，这些预测会更强，这表明人们不仅依赖与财务无关（但叙述相关）的信息进行预测，而且错误地将时间顺序强加于该信息. 这些有偏见的预测对资产配置选择产生了下游影响（实验 2），这些选择部分是由对公司业绩新闻的情感反应驱动的（实验 3）。专业知识有一些轻微的影响，但总体而言，叙事的影响似乎在所研究的所有专业水平上都是一致的，包括专业的金融分析师。最后，我们讨论了选择叙事理论的前景，该理论为经济行为提供了新的微观基础见解。