The Statistical Self-Fulfilling Selection Fallacy: How Erroneous Beliefs Reinforce Themselves

Abstract: We identify a previously overlooked collective belief mechanism that inadvertently leads consumers to maintain—and even strengthen—erroneous beliefs concerning the relationship between variables (e.g., overestimating the link between brand prestige and product quality). This mechanism, which manifests even in the absence of motivated reasoning, doesn’t merely hide the truth: it produces deceptively compelling evidence that actually appears to support those false beliefs, thereby reinforcing them. Moreover, we show that it mainly produces ‘Type I Errors’ (overestimating the strength of a relationship), but not ‘Type II Errors’ (failing to observe a true relationship).