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We provide new experimental evidence on the underlying mechanisms of under\u2010 and overreaction by comparing how people make inferences\n                    <jats:italic>and<\/jats:italic>\n                    revise forecasts in the same information environment. Participants underreact to signals when inferring about underlying states, but overreact to the same signals when revising forecasts about future outcomes\u2014a phenomenon we term \u201cthe inference\u2010forecast gap.\u201d We show that this gap is largely driven by different simplifying heuristics used in the two tasks. Additional treatments suggest that the choice of heuristics is affected by the similarity between statistics in the information environment and the statistic elicited by the belief\u2010updating problem.\n                  <\/jats:p>","DOI":"10.3982\/ecta23334","type":"journal-article","created":{"date-parts":[[2026,7,16]],"date-time":"2026-07-16T13:05:52Z","timestamp":1784207152000},"page":"1279-1312","source":"Crossref","is-referenced-by-count":3,"title":["The Inference\u2010Forecast Gap in Belief Updating"],"prefix":"10.3982","volume":"94","author":[{"given":"Tony Q.","family":"Fan","sequence":"first","affiliation":[{"name":"Department of Economics, College of Business, Lehigh University"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Yucheng","family":"Liang","sequence":"additional","affiliation":[{"name":"Tepper School of Business, Carnegie Mellon University"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Cameron","family":"Peng","sequence":"additional","affiliation":[{"name":"Department of Finance, London School of Economics and Political Science"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"2359","published-online":{"date-parts":[[2026]]},"reference":[{"issue":"3","key":"ecta70054-bib-0001","doi-asserted-by":"crossref","first-page":"1713","DOI":"10.1093\/qje\/qjad009","volume":"138","author":"Afrouzi","year":"2023","journal-title":"Quarterly Journal of Economics"},{"key":"ecta70054-bib-0002","unstructured":"Agranov, Marina and P\u00ebllumb Reshidi (2024), \u201cDisentangling Suboptimal Updating: Complexity, Structure, and Sequencing.\u201d"},{"key":"ecta70054-bib-0003","doi-asserted-by":"crossref","unstructured":"Aina, Chiara and Florian H. 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