Endogenous Preferences and Conformity: Evidence From a Pilot Experiment

Sergio Beraldo, Valerio Filoso and Marco Stimolo ()
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Marco Stimolo: Department of Law, University of Napoli, Italy

No 24, Working papers from Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino

Abstract: Conformity behavior, i.e., the agreement between an individual’s choices and the prevailing behavior of a reference group, is a commonly observed phenomenon. Though some types of social interactions may give raise to specific incentives to adopt either a majoritarian or a contrarian behavior, we want to investigate whether the same behavioral pattern emerges even when no economic motivator is present. To accomplish this task, we employ an experimental Vickrey median price auction designed to provide incentives to reveal individual preferences truthfully. Whereas we feed the control group with just the median price, we give out additional information on other players' bids for those in the treated groups. These informations are designed to provide hints at revising individual bids. Our main results point to a strong tendency of the individuals to adapt their behavior to those of the individuals which can be observed. Moreover, although a clear shaping effect (a regression toward the median price) does emerge for the control group, the provision of information about the actual behavior of a sample of the relevant group is able to minimize or neutralize the shaping effect. Specifically, we find that players adjust to a divergence between their bids and the average bid of a reference group by a factor of 47.4%-87.3%. These figures point to a relevant role for conformity in group behavior.

Keywords: Endogenous preferences; shaping effect; social conformity; Vickrey auction (search for similar items in EconPapers)
JEL-codes: C91 C92 D44 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2014-03
New Economics Papers: this item is included in nep-cdm, nep-evo and nep-exp
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http://www.bemservizi.unito.it/repec/tur/wpapnw/m24.pdf First version, 2014 (application/pdf)

Related works:
Working Paper: Endogenous Preferences and Conformity: Evidence From a Pilot Experiment (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:tur:wpapnw:024

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