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Viral Narratives: The Role of Narratives for Economic Belief Formation

Project description

Understanding the virality of economic narratives

Narratives play a critical role in shaping expectations and influencing economic decisions. Considering this fact, the ERC-funded VIRAL project aims to uncover the mechanisms driving the spread and impact of economic narratives through large-scale experiments. Specifically, it will analyse qualitative data from speech recordings of economic narratives alongside quantitative data on beliefs and behaviours. Focusing on the labour market, it will explore which narratives about economic phenomena are most likely to go viral, the characteristics that predict their spread, and how they evolve during transmission. Additionally, VIRAL will examine how the desire to entertain shapes these narratives. By integrating administrative data on economic behaviours, it sheds light on the interplay between narratives and economic decision-making.

Objective

This proposal seeks to study economic narratives. Narratives may both shape expectation formation and influence economic decisions. Using large-scale experiments, this proposal seeks to better understand the drivers of the virality of narratives as well as the mechanisms underlying their persuasive effects. A key feature of this proposal is the combination of qualitative data on economic narratives, as measured in speech recordings, with quantitative data on beliefs and economic behaviors. In Part 1, I seek to study the production and transmission of narratives. In Part 1a, I plan to study which types of narratives about economic phenomena tend to get retold and thereby go viral. The experiments will examine which features of narratives are predictive of their virality and how narratives mutate through the transmission process. In Part 1b, I plan to study how incentives to entertain shape people’s narratives and how the resulting distortions affect downstream belief formation. Part 2 aims to combine administrative data on high-stakes economic behaviors with economic narratives, as measured with speech recordings. I aim to measure narratives about the labor market effects of Artificial intelligence in large representative samples as well as among journalists, politicians and labor market experts. I then plan to relate narratives to important labor market behaviors and educational choices and to examine their origins. Finally, Part 3 proposes to study the mechanisms behind the persuasiveness of narratives. Our experiments will allow us to cleanly identify how narratives affect belief updating and confidence compared to well-defined Bayesian benchmarks. We plan to examine the mechanisms, with a particular focus on how narratives facilitate the process of mental simulation. These projects trace the journey of economic narratives from their inception and spread to their impacts on behaviors and beliefs, and unveil the underlying cognitive and social mechanisms.

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Keywords

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Programme(s)

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Topic(s)

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Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

HORIZON-ERC - HORIZON ERC Grants

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Call for proposal

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(opens in new window) ERC-2024-STG

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Host institution

UNIVERSITAT ZU KOLN
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 1 500 000,00
Address
ALBERTUS MAGNUS PLATZ
50931 KOLN
Germany

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Region
Nordrhein-Westfalen Köln Köln, Kreisfreie Stadt
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 1 500 000,00

Beneficiaries (1)

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