If people form precise beliefs about things that matter for decision-making and then update beliefs less in response to new information, TSLS will understate the average effect of beliefs on behavior. I propose an alternative estimator and apply it to the gender gap.

Lockdowns were binding for small businesses and pessimistic demand projections explain delays among firms that could legally reopen. Governments set more stringent guidelines for reopening, suggesting they internalized costs of contagion that businesses did not.