IDEAS home Printed from https://ideas.repec.org/p/pab/wpaper/19.03.html
   My bibliography  Save this paper

Social Influence and Position Effects

Author

Listed:
  • Marisa Hidalgo-Hidalgo

    (Universidad Pablo de Olavide)

  • Natalia Jiménez

    (Universidad Pablo de Olavide & Middlesex University)

  • Dunia López-Pintado

    (Universidad Pablo de Olavide)

Abstract

Online search companies use a default ranking to present alternatives to consumers. The salience of an alternative can be described by its position in the presentation order and its popularity, derived from the opinion of others. We perform a lab experiment to study social influence and position effects in a stylized and controlled environment where alternatives have an objective value, common to all participants. Nevertheless, due to time constraints, finding the optimal choice is complex. We consider three different settings: (i) social influence is not present, (ii) social influence and the presentation order go in the same direction and, (iii) social influence is not aligned with the presentation order. We find that, although position effects are stronger than social influence (or popularity) effects for the searching behavior, social influence effects are more relevant for predicting the actual choice. We also find strong evidence of nonlinearity regarding both social influence and position effects. From an individual perspective, we obtain that those subjects who recognize their own errors or come from less wealthy families have a higher sensibility to social influence when it is reinforced by position, whereas overconfident and reflexive individuals are more influenceable when position and social influence are confronted. Interestingly, we do not find any gender effects.

Suggested Citation

  • Marisa Hidalgo-Hidalgo & Natalia Jiménez & Dunia López-Pintado, 2019. "Social Influence and Position Effects," Working Papers 19.03, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:19.03
    as

    Download full text from publisher

    File URL: http://www.upo.es/serv/bib/wps/econ1903.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joshua Schwartzstein, 2014. "Selective Attention And Learning," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1423-1452, December.
    2. Pablo Brañas-Garza & Diego Jorrat & Antonio M. Espín & Angel Sánchez, 2023. "Paid and hypothetical time preferences are the same: lab, field and online evidence," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 412-434, April.
    3. Brandts, Jordi & Giritligil, Ayça Ebru & Weber, Roberto A., 2015. "An experimental study of persuasion bias and social influence in networks," European Economic Review, Elsevier, vol. 80(C), pages 214-229.
    4. Uri Gneezy & Jan Potters, 1997. "An Experiment on Risk Taking and Evaluation Periods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 631-645.
    5. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    6. Raluca M. Ursu, 2018. "The Power of Rankings: Quantifying the Effect of Rankings on Online Consumer Search and Purchase Decisions," Marketing Science, INFORMS, vol. 37(4), pages 530-552, August.
    7. Kocher, Martin G. & Sutter, Matthias, 2006. "Time is money--Time pressure, incentives, and the quality of decision-making," Journal of Economic Behavior & Organization, Elsevier, vol. 61(3), pages 375-392, November.
    8. Daniel Fleder & Kartik Hosanagar, 2009. "Blockbuster Culture's Next Rise or Fall: The Impact of Recommender Systems on Sales Diversity," Management Science, INFORMS, vol. 55(5), pages 697-712, May.
    9. Olga Shurchkov, 2012. "Under Pressure: Gender Differences In Output Quality And Quantity Under Competition And Time Constraints," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1189-1213, October.
    10. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2013. "Salience and Consumer Choice," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 803-843.
    11. Bougheas, Spiros & Nieboer, Jeroen & Sefton, Martin, 2013. "Risk-taking in social settings: Group and peer effects," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 273-283.
    12. Miriam Hortas Rico & Jorge Onrubia Fernández, 2014. "Renta personal de los municipios espanoles y su distribución: Metodología de estimación a partir de microdatos tributarios," Studies on the Spanish Economy eee2014-12, FEDEA.
    13. David Godes & Dina Mayzlin, 2009. "Firm-Created Word-of-Mouth Communication: Evidence from a Field Test," Marketing Science, INFORMS, vol. 28(4), pages 721-739, 07-08.
    14. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    15. Babur De los Santos & Sergei Koulayev, 2017. "Optimizing Click-Through in Online Rankings with Endogenous Search Refinement," Marketing Science, INFORMS, vol. 36(4), pages 542-564, July.
    16. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    17. Thomas Blake & Chris Nosko & Steven Tadelis, 2015. "Consumer Heterogeneity and Paid Search Effectiveness: A Large‐Scale Field Experiment," Econometrica, Econometric Society, vol. 83, pages 155-174, January.
    18. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    19. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    20. Dunia López-Pintado & Duncan J. Watts, 2008. "Social Influence, Binary Decisions and Collective Dynamics," Rationality and Society, , vol. 20(4), pages 399-443, November.
    21. Bernardo Moreno & María del Pino Ramos-Sosa & Ismael Rodriguez-Lara, 2019. "Conformity and truthful voting under different voting rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(2), pages 261-282, August.
    22. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    23. Anindya Ghose & Panagiotis G. Ipeirotis & Beibei Li, 2014. "Examining the Impact of Ranking on Consumer Behavior and Search Engine Revenue," Management Science, INFORMS, vol. 60(7), pages 1632-1654, July.
    24. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    25. Ben Greiner, 2004. "The Online Recruitment System ORSEE 2.0 - A Guide for the Organization of Experiments in Economics," Working Paper Series in Economics 10, University of Cologne, Department of Economics.
    26. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
    27. Ben Greiner, 2004. "The Online Recruitment System ORSEE - A Guide for the Organization of Experiments in Economics," Papers on Strategic Interaction 2003-10, Max Planck Institute of Economics, Strategic Interaction Group.
    28. Fatas, Enrique & Hargreaves Heap, Shaun P. & Rojo Arjona, David, 2018. "Preference conformism: An experiment," European Economic Review, Elsevier, vol. 105(C), pages 71-82.
    29. Jacob K. Goeree & Leeat Yariv, 2015. "Conformity in the lab," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 15-28, July.
    30. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    31. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, vol. 99(3), pages 864-882, June.
    32. Van Loo, Ellen J. & Caputo, Vincenzina & Nayga, Rodolfo M. & Seo, Han-Seok & Zhang, Baoyue & Verbeke, Wim, 2015. "Sustainability labels on coffee: Consumer preferences, willingness-to-pay and visual attention to attributes," Ecological Economics, Elsevier, vol. 118(C), pages 215-225.
    33. Mayer, Adalbert & Puller, Steven L., 2008. "The old boy (and girl) network: Social network formation on university campuses," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 329-347, February.
    34. Charness, Gary & Gneezy, Uri & Imas, Alex, 2013. "Experimental methods: Eliciting risk preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 43-51.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ciril Bosch-Rosa & Thomas Meissner & Antoni Bosch-Domènech, 2018. "Cognitive bubbles," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 132-153, March.
    2. Julius Pahlke & Sebastian Strasser & Ferdinand Vieider, 2015. "Responsibility effects in decision making under risk," Journal of Risk and Uncertainty, Springer, vol. 51(2), pages 125-146, October.
    3. Alexia Gaudeul, 2013. "Social preferences under uncertainty," Jena Economics Research Papers 2013-024, Friedrich-Schiller-University Jena.
    4. Paolo Crosetto & Antonio Filippin, 2013. "A Theoretical and Experimental Appraisal of Five Risk Elicitation Methods," SOEPpapers on Multidisciplinary Panel Data Research 547, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Delfino, Alexia & Marengo, Luigi & Ploner, Matteo, 2016. "I did it your way. An experimental investigation of peer effects in investment choices," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 113-123.
    6. Füllbrunn, Sascha & Luhan, Wolfgang J., 2015. "Am I my Peer's Keeper? Social Responsibility in Financial Decision Making," Ruhr Economic Papers 551, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Buckert, Magdalena & Oechssler, Jörg & Schwieren, Christiane, 2017. "Imitation under stress," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 252-266.
    8. Florian Heine & Martin Sefton, 2018. "To Tender or Not to Tender? Deliberate and Exogenous Sunk Costs in a Public Good Game," Games, MDPI, vol. 9(3), pages 1-28, June.
    9. Bruttel, Lisa & Fischbacher, Urs, 2013. "Taking the initiative. What characterizes leaders?," European Economic Review, Elsevier, vol. 64(C), pages 147-168.
    10. Astrid Gamba & Elena Manzoni & Luca Stanca, 2017. "Social comparison and risk taking behavior," Theory and Decision, Springer, vol. 82(2), pages 221-248, February.
    11. Ola Andersson & Håkan J. Holm & Jean-Robert Tyran & Erik Wengström, 2016. "Deciding for Others Reduces Loss Aversion," Management Science, INFORMS, vol. 62(1), pages 29-36, January.
    12. William Morrison and Robert Oxoby, 2010. "Loss Aversion in the Laboratory," LCERPA Working Papers lm0072, Laurier Centre for Economic Research and Policy Analysis, revised 1970.
    13. Mamadou Gueye & Nicolas Querou & Raphaël Soubeyran, 2018. "Does equity induce inefficiency? An experiment on coordination," Post-Print hal-02100263, HAL.
    14. Islam, Asad & Lee, Wang-Sheng & Nicholas, Aaron, 2021. "The Effects of Chess Instruction on Academic and Non-cognitive Outcomes: Field Experimental Evidence from a Developing Country," Journal of Development Economics, Elsevier, vol. 150(C).
    15. Holger Herz & Dmitry Taubinsky, 2018. "What Makes a Price Fair? An Experimental Study of Transaction Experience and Endogenous Fairness Views," Journal of the European Economic Association, European Economic Association, vol. 16(2), pages 316-352.
    16. Dirk-Jan Janssen & Sascha Füllbrunn & Utz Weitzel, 2019. "Individual speculative behavior and overpricing in experimental asset markets," Experimental Economics, Springer;Economic Science Association, vol. 22(3), pages 653-675, September.
    17. Tamás Csermely & Alexander Rabas, 2016. "How to reveal people’s preferences: Comparing time consistency and predictive power of multiple price list risk elicitation methods," Journal of Risk and Uncertainty, Springer, vol. 53(2), pages 107-136, December.
    18. Konstantin Matthies & Flavio Toxvaerd, 2023. "Rather doomed than uncertain: risk attitudes and transmissive behavior under asymptomatic infection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(1), pages 1-44, July.
    19. Sascha Füllbrunn & Wolfgang J. Luhan, 2015. "Am I my Peer‘s Keeper? Social Responsibility in Financial Decision Making," Ruhr Economic Papers 0551, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    20. Natalia Montinari & Michela Rancan, 2013. "Social preferences under risk : the role of social distance," RSCAS Working Papers 2013/90, European University Institute.

    More about this item

    Keywords

    social influence; ranking; online searching; lab experiments.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pab:wpaper:19.03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publicación Digital - UPO (email available below). General contact details of provider: https://edirc.repec.org/data/deupoes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.