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The Effect of Peer Observation on the Consumption of Temptation Goods: Experimental Evidence

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  • Grohmann, Antonia Charlotte
  • Sakha, Sahra

Abstract

This paper uses a clean experiment to investigate the impact of peer observation on the consumption decisions of rural households in Thailand. We find that those groups that observe each other show lower within group standard deviation in their decisions. At the same time, we also find that individual choice is influenced by group choice. We find that unfamiliarity with product is counteracted by peer effects. Those in a group that have higher cognitive ability are able to resist peer temptation.

Suggested Citation

  • Grohmann, Antonia Charlotte & Sakha, Sahra, 2015. "The Effect of Peer Observation on the Consumption of Temptation Goods: Experimental Evidence," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113084, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113084
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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