Are people more likely to (mis)interpret information so that it aligns with their ideological identity when relying on feelings compared to when engaging in analytical thinking? Or is it the other way around: Does deliberation increase the propensity to (mis)interpret information to confirm existing political views? In a behavioral experiment, participants (n = 1207, Swedish sample) assessed numerical information concerning the effects of gender quotas and immigration either under time pressure or under no time pressure. To measure trait differences in cognitive sophistication, we also collected data on numeric ability. We found clear evidence of motivated reasoning when assessing both the effects of gender quotas on companies’ financial results and the effect of refugee intake on crime rates. Subjects who prioritized equality over liberty on the labor market were 13 percentage points less likely to correctly assess numerical information depicting that companies that used gender quotas when hiring made less profit. Subjects who classified themselves as ‘Swedes’ rather than ‘World citizens’ were 14 percentage points less likely to correctly assess numerical information depicting that crime rates decreased following immigration. Time pressure did not affect the likelihood to engage in motivated reasoning, while subjects with higher numeric ability were less likely to engage in motivated reasoning when analyzing information concerning refugee intake, but more likely to engage in motivated reasoning when analyzing information regarding the effect of gender quotas. Together these results indicate that motivated reasoning is primarily driven by individual differences in analytical thinking at the trait level and not by situational factors such as time pressure, and that whether motivated reasoning is primarily driven by analysis or feelings depends on the topic at hand.

The objective of this thesis is to improve our understanding of how individual differences in intuitive and analytic decision making are associated with people’s behavior as well as their well-being. The first three essays investigate, in turn, how self-control—a typical System 2 driven ability—correlates with financial behavior, financial well-being, and affective forecasting ability. The fourth essay leverages an experimental design, in which a randomized treatment attempts to inhibit the use of System 2 processing by individuals by setting them under time pressure, while measuring how they interpret numerical information.

The first essay, Does Self-Control Predict Financial Behavior and Financial Well-Being?, describes how variation in self-reported individual differences in self-control, optimism and deliberativeness predicts financial behavior and financial well-being. Data was collected by means of an online survey distributed to a representative, adult Swedish sample. Results indicate that individuals with better self-control were more likely to engage in sound financial behaviors, were less anxious about financial matters, and felt more secure in their current and future financial situation than individuals displaying lower levels of self-control.

The second essay, Subjective Self-Control but Not Objective Measures of Executive Functions Predicts Financial Behavior and Well-Being, is a follow-up study of the first essay. Apart from using the same self-reported measures of self-control, optimism, and deliberativeness as essay one does, this analysis additionally includes an extensive test battery of objective performance measures of executive functions and intelligence. Findings suggest that, while self-reported self-control predicts both financial behavior and subjective financial well-being, neither of the executive functions, nor intelligence do so. This indicates that an ability to form good habits and avoid temptation is more important for sound financial behavior and financial well-being than actual inhibitory control.

The third essay, Better Self-Control Does Not Imply Fewer Affective Forecasting Errors, explores whether individual-level differences in self-control can explain observed variation in affective forecasting ability. Moreover, it assesses whether participants with strong self-control are more likely to make “optimal choices” in an intertemporal choice task: i.e. choices that maximize their own expected happiness. To test this, the study leveraged a laboratory experiment with a student sample in Linköping and Stockholm. Study results uncover no evidence of self-control predicting affective forecasting ability. Equally, self-control seemingly had no effect on the probability of individuals’ choosing happiness maximizing options.

The fourth essay, Motivated Reasoning, Fast and Slow, investigates whether prior beliefs may hinder individuals from interpreting information about immigration and gender quotas correctly: a process commonly referred to as motivated reasoning. In general terms, motivated reasoning can be conceptualized as an intuitive or analytic process. Testing the prevalence of this form of sense-making, we ran an online experiment where half the respondents were tasked to interpret numeric information under time constraints, and the rest without said constraints. Findings provide clear evidence of the existence of motivated reasoning with regards to issues of both immigration and gender quotas. Numeric ability seemingly reduced the probability of individuals to engage in motivated reasoning, while time pressure had no effect on said likelihood. Hence, results suggest that motivated reasoning is an intuitive, rather than an analytic process.

Executive functions consist of three separable but correlated functions; inhibition, working memory, and shifting. Here we used an extensive and validated battery of objective performance measures of executive functions and intelligence to investigate if individual differences in these cognitive abilities can explain sound financial behavior and subjective financial well-being. Additionally, we measured a set of self-reported personality traits, including self-control, optimism, and deliberative thinking. We found that neither executive functions nor intelligence was associated with sound financial behavior and financial well-being in our sample. Although objective self-control, measured as the ability to override impulses (i.e. inhibition), could not be linked to financial behavior and financial wellbeing, subjective (i.e. self-reported) self-control had a strong positive effect. This indicates that the ability to avoid financial temptation is more important than the cognitive ability to override impulses when it comes to sound financial behavior and financial well-being.

To improve our understanding of how people make financial decisions, it is important to investigate what psychological characteristics influence individuals’ positive financial behavior and financial well-being. In this study, we explore the effect of individual differences in self-control and other non-cognitive factors on financial behavior and financial well-being. A survey containing measures of financial behavior, subjective financial well-being, self-control, optimism, deliberative thinking and demographic variables was sent to a representative sample (n=2063)" role="presentation" style="box-sizing: border-box; display: inline-block; line-height: normal; font-size: 14.399999618530273px; word-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; border: 0px; padding: 0px; margin: 0px; color: rgb(80, 80, 80); font-family: Arial, Helvetica, 'Lucida Sans Unicode', 'Microsoft Sans Serif', 'Segoe UI Symbol', STIXGeneral, 'Cambria Math', 'Arial Unicode MS', sans-serif; position: relative;"> of the Swedish population. Our findings extend the application of the behavioral lifecycle hypothesis beyond savings behavior, to include general financial behavior. People with good self-control are more likely to save money from every pay-check, have better general financial behavior, feel less anxious about financial matters, and feel more secure in their current and future financial situation.