Economic agents as harried triage nurses grabbing for an immediate *diagnosis* from the salient features of the case in front of them; **Nicola Gennaioli and Andrei Shleifer**: *Diagnostic Expectations*: "Diagnostic expectations are represented by a linear combination of the rational expectations of π_{π‘+1} held at π‘ and at π‘ β 1:

It is not that decision-makers compute rational expectations and combine them.... Rather, oversampling representative future states yields the linear combination in (4). This formula reflects a βkernel of truthβ logic: diagnostic expectations differ from rational expectations by a shift in the direction of the information received at π‘, given by [πΌπ‘(ππ‘+1) β πΌπ‘β1(ππ‘+1)]...

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#shouldread
#expectatiobs
#economicsgoneright
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