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 ππ‘+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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