Is the fundamental attribution error “fundamental”

We provide one of the first experiments in economics that carefully studies the fundamental attribution error. This bias refers to the tendency of observers to assign too much weight to dispositional factors (e.g., preferences and ability) while too little to situational factors (e.g., constraints) when interpreting others’ behaviours and performances. In our experiment, participants perform an IQ quiz. They are thus randomly assigned to be agents or observers and are matched in pairs. Subsequently, they receive signals that carry both dispositional and situational information about the agents' performance. We thus study how observers incorporate this information into their posterior beliefs differentially from the agents. In particular, we test whether observers over-attribute the signals' content to the agents' dispositions. We do not find evidence in support of the fundamental attribution error. Indeed, observers equally attribute the received signals to both the agents' ability and external factors. Our study therefore shows that the fundamental attribution error is not as prevalent as literature in psychology would suggest. Finally, by looking at agents' belief formation, we also rule out that agents interpret information about their relative rank in a self-serving fashion.