How One Number Creates a Self-Fulfilling Prediction

Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend · Jun 21, 2026 · 8m · transcript

Episode 65 of Behavioral Economics with Fexingo explores the placebo effect in economics — how expectations alone can shape financial outcomes. Lucas and Luna examine a real-world experiment from the University of Chicago where students given a 'high-performing' investment portfolio actually earned higher returns than those told their portfolio was average, even though both groups held the identical assets. The hosts break down why belief becomes reality in markets, from investor sentiment to company morale, and discuss how expectations bias can compound over time. They also touch…