Abstract
This paper looks for, but cannot find, evidence that links belief
inconsistency to belief inaccuracy or economic loss. Economists
with consistent (i.e., Bayesian) conditional beliefs about the sensitivity
and positive predictive value of the Prostate Specific Antigen
(PSA) test have unconditional beliefs about the risk of prostate
cancer that are, if anything, less accurate than the beliefs of inconsistent
non-Bayesians. PSA decisions depend more on the advice
of doctors and family members than on beliefs about cancer risks.
Men’s beliefs about the pros and cons of PSA testing do not
explain self-reported PSA decisions. This absence of evidence that
non-Bayesian beliefs lead to economic loss suggests that belief
consistency may be relatively unimportant as a normative criterion
in high-stakes decision tasks that reward accuracy instead
of consistency. A technique is introduced for eliciting measures
of both consistency and accuracy of an individual’s probabilistic
beliefs.