Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2025-01-05T20:53:41.142Z Has data issue: false hasContentIssue false
  • English
  • Français

Conformity in the lab

Published online by Cambridge University Press:  01 January 2025

Jacob K. Goeree  and
Leeat Yariv
Jacob K. Goeree
Affiliation:
Centre for Policy and Market Design, Economics Discipline Group, University of Technology Sydney, Broadway, PO Box 123, Sydney, NSW 2007, Australia International Faculty, University of Cologne, Albertus-Magnus-Platz, 50923 Cologne, Germany
Leeat Yariv*
Affiliation:
Division of the Humanities and Social Sciences, California Institute of Technology, Mail code 228-77, Pasadena 91125, CA, USA
*
e-mail: lyariv@hss.caltech.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

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.

Keywords

ConformitySocial learningStrategic voting

JEL classification

C91: Laboratory, Individual Behavior D70: General D80: General
Type
Original Paper
Information
Journal of the Economic Science Association , Volume 1 , Issue 1 , July 2015 , pp. 15 - 28
Copyright
Copyright © Economic Science Association 2015

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Electronic supplementary material The online version of this article (doi:10.1007/s40881-015-0001-7) contains supplementary material, which is available to authorized users.

We thank Tom Palfrey and Charlie Plott for several useful conversations as well as Nageeb Ali, Navin Kartik, Nikos Nikiforakis, and Robert Slonim for comments on an earlier draft. Roy Chen, Lauren Feiler, and Angelo Polydoro provided outstanding research assistance. We gratefully acknowledge financial support from the National Science Foundation (SES 0551014), the Gordon and Betty Moore Foundation (Grant 1158), and the European Research Council (ERC Advanced Investigator Grant, ESEI-249433).

References

Agranov, M., Goeree, J. K., & Romero, J., Yariv, L. (2014) What makes voters turn out: the effects of polls and beliefs, mimeo.Google Scholar
Anderson, L. (2001). Payoff effects in information cascade experiments. Economic Inquiry, 39(4), 609–615. 10.1093/ei/39.4.609CrossRefGoogle Scholar
Anderson, L. R., Holt, C. A. (1997). Information cascades in the laboratory. American Economic Review, 87(5), 847–862.Google Scholar
Apesteguia, J., Huck, S., Oechssler, J. (2007). Imitation—theory and experimental evidence. Journal of Economic Theory, 136(1), 217–235. 10.1016/j.jet.2006.07.006CrossRefGoogle Scholar
Asch, S. E. (1958). Effects of group pressure upon the modification and distortion of judgements. In Maccoby, E. E., Newcomb, T. M., and Hartley, E. L., (Eds.), Readings in social psychology. (pp. 174–183). New York: Holt.Google Scholar
Banerjee, A. V. (1992). A simple model of herd behavior. Quarterly Journal of Economics, 107(3), 797–817. 10.2307/2118364CrossRefGoogle Scholar
Bikhchandani, S., Hirshleifer, D., Welch, I. (1992). A theory of fads, fashion, custom, and cultural change as information cascades. Journal of Political Economy, 100(5), 992–1026. 10.1086/261849CrossRefGoogle Scholar
Bikhchandani, S., Hirshleifer, D., Welch, I. (1998). Learning from the behavior of others: conformity, fads, and informational cascades. Journal of Economic Perspectives, 12(3), 151–170. 10.1257/jep.12.3.151CrossRefGoogle Scholar
Çelen, B., Hyndman, K. (2012). Social learning through endogenous information acquisition: an experiment. Management Science, 58(8), 1525–1548. 10.1287/mnsc.1110.1506CrossRefGoogle Scholar
Çelen, B., Kariv, S. (2004). Distinguishing informational cascades from herd behavior in the laboratory. American Economic Review, 94(3), 484–497. 10.1257/0002828041464461CrossRefGoogle Scholar
Clement, M. B., Tse, S. Y. (2005). Financial analyst characteristics and herding behavior in forecasting. The Journal of Finance, 60(1), 307–341. 10.1111/j.1540-6261.2005.00731.xCrossRefGoogle Scholar
Corrazzini, L., Greiner, B. (2007). Herding, social preferences and (non-) conformity. Economics Letters, 97(1), 74–80. 10.1016/j.econlet.2007.02.024CrossRefGoogle Scholar
Drehmann, M., Oechssler, J., Roider, A. (2005). Herding and contrarian behavior in financial markets—an internet experiment. American Economic Review, 95(5), 1403–1426. 10.1257/000282805775014317CrossRefGoogle Scholar
Drehmann, M., Oechssler, J., & Roider, A. Herding with and without payoff externalities—an internet experiment. International Journal of Industrial Organization, 25(2), pp. 391–415.CrossRefGoogle Scholar
Feddersen, T. J., Pesendorfer, W. (1996). The swing voter’s curse. American Economic Review, 86(3), 408–424.Google Scholar
Fehr, E., Schmidt, K. M. (1999). A theory of fairness, competition and cooperation. Quarterly Journal of Economics, 114(3), 814–868. 10.1162/003355399556151CrossRefGoogle Scholar
Fischbacher, U. (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10(2), 171–178. 10.1007/s10683-006-9159-4CrossRefGoogle Scholar
Gale, D. (1996). What have we learned from social learning? European Economic Review, 40(3–5), 617–628. 10.1016/0014-2921(95)00074-7CrossRefGoogle Scholar
Goeree, J., Yariv, L. (2011). An experimental study of collective deliberation. Econometrica, 79(3), 893–921. 10.3982/ECTA8852Google Scholar
Hung, A., Plott, C. R. (2001). Information cascades: replication and an extension to majority rule and conformity-rewarding institutions. American Economic Review, 91(5), 1508–1520. 10.1257/aer.91.5.1508CrossRefGoogle Scholar
Kübler, D., Weizsäcker, G. (2004). Limited depth of reasoning and failure of cascade formation in the laboratory. Review of Economic Studies, 71, 425–441. 10.1111/0034-6527.00290CrossRefGoogle Scholar
Offerman, T., Potters, J., Sonnemans, J. (2002). Imitation and belief learning in an oligopoly experiment. Review of Economic Studies, 69(4), 973–997. 10.1111/1467-937X.00233CrossRefGoogle Scholar
Sherif, M. (1937). An experimental approach to the study of attitudes. Sociometry, 1, 90–98. 10.2307/2785261CrossRefGoogle Scholar
Vega-Redondo, F. (1997). The evolution of Walrasian behavior. Econometrica, 65(2), 375–384. 10.2307/2171898CrossRefGoogle Scholar
Supplementary material: File

Goeree and Yariv supplementary material 1

Goeree and Yariv supplementary material 1
Download Goeree and Yariv supplementary material 1(File)
File 66.4 KB
Supplementary material: File

Goeree and Yariv supplementary material 2

Goeree and Yariv supplementary material 2
Download Goeree and Yariv supplementary material 2(File)
File 59.5 KB
Supplementary material: File

Goeree and Yariv supplementary material 3

Goeree and Yariv supplementary material 3
Download Goeree and Yariv supplementary material 3(File)
File 177.2 KB
Supplementary material: File

Goeree and Yariv supplementary material 4

Goeree and Yariv supplementary material 4
Download Goeree and Yariv supplementary material 4(File)
File 128.5 KB
Supplementary material: File

Goeree and Yariv supplementary material 5

Goeree and Yariv supplementary material 5
Download Goeree and Yariv supplementary material 5(File)
File 228.4 KB
Supplementary material: File

Goeree and Yariv supplementary material 6

Goeree and Yariv supplementary material 6
Download Goeree and Yariv supplementary material 6(File)
File 487.9 KB