Conformity in the lab

We use a revealed preference approach to disentangle conformity, an intrinsic taste to follow others, from information-driven herding. We provide observations from a series of sequential decision-making experiments in which subjects choose the type of information they observe before making their dec...

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Bibliographic Details
Published inJournal of the Economic Science Association Vol. 1; no. 1; pp. 15 - 28
Main Authors Goeree, Jacob K., Yariv, Leeat
Format Journal Article
LanguageEnglish
Published New York Springer US 01.07.2015
Subjects
Behavioral/Experimental Economics
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Game Theory
Microeconomics
Operations Research/Decision Theory
Original Paper
Social and Behav. Sciences
Social learning
C91
D70
Conformity
D80
Strategic voting
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Summary:We use a revealed preference approach to disentangle conformity, an intrinsic taste to follow others, from information-driven herding. We provide observations from a series of sequential decision-making experiments in which subjects choose the type of information they observe before making their decision. Namely, subjects choose between observing a private (statistically informative) signal or the history of play of predecessors who have not chosen a private signal (i.e., a statistically uninformative word-of-mouth signal). In our setup, subjects choose the statistically uninformative social signal 34 % of the time and, of those, 88 % follow their observed predecessors’ actions. When allowing for payoff externalities by paying subjects according to the collective action chosen by majority rule, the results are amplifed and the social signal is chosen in 51 % of all cases, and 59 % of those who pick the social signal follow the majority choice. The results from the majority treatment demonstrate that conformist behavior is not driven by inequality aversion, nor by strategic voting behavior in which voters balance others who are uninformed. Raising the stakes five-fold does not eliminate conformist behavior; in both treatments, the social signal is chosen nearly 50 % of the time. Individual level analysis yields the identification of rules of thumb subjects use in making their decisions.
ISSN:2199-6776
2199-6784
2199-6784
2199-6776
DOI:10.1007/s40881-015-0001-7