To investigate more on the role of pessimism and uncertainty in decisions and behaviour, as part of this project work was done on belief formation by individuals facing information inflow. In particular, information effects seem to be short-lived. Moreover, caution should be taken when analysing survey data on reported behaviour and stated beliefs as risk-aversion may bias responses, potentially masking effects of pessimism (ambiguity aversion) on decisions. These lines of research are studied in the papers "Big news for little people" and "Risk and Ambiguity Attitudes in the Formation of Beliefs" by D. Vinogradov (jointly with M. Lamla).