Abstract
People in Germany overwhelmingly believe that the Euro introduction caused an overall price increase, however, no such increase actually took place. To investigate whether this disparity could be based on biased perceptions of the average price trend, four studies were conducted. Participants received two menus from a restaurant (one βoldβ menu with German Mark (DM) prices and one βnewβ menu with Euro prices) and were asked to estimate the price trend (in per cent). In all of these studies, price trend judgements were biased towards rising prices. If the prices had in fact been raised, the magnitude of this price increase was overestimated. If the prices had remained stable, significant price increases were perceived. And if the prices had fallen, they were perceived as having remained stable. The bias was systematically related to participants' expectations concerning price increases. A βselective outcome correctionβ hypothesis proved to best fit the data: incorrect calculation outcomes that are in line with one's expectations are overlooked, whereas incorrect inconsistent outcomes are detected and corrected. The results imply that expectations can influence judgements even when clear disconfirming evidence is available that can be compared with an objective standard, thus leaving no room for interpretation. Copyright Β© 2004 John Wiley & Sons, Ltd.