Virtual social networking increases the individual's economic predictability

George Mengov, Nikolay Georgiev, Irina Zinovieva and Anton Gerunov

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2022, vol. 101, issue C

Abstract: Forecasting economic choice is hard because today we still do not know enough about human motivation. A fundamental problem is the lack of knowledge about how the neural networks in the brain give rise to thinking and decision making. One way to address the issue has been to develop simplified economic experiments, in which participants need skills of little complexity and their minds employ cognitive mechanisms, already well understood by mathematical psychology and neuroscience. Here we take a neural model for rudimentary emotion generation and memorizing and use it as a guiding theory to understand decision making in an experimental oligopoly market. For the first time in that line of research, participants are put in a lab virtual social network serving to exchange opinions about deals with companies. On average, choices become significantly more predictable when people participate in the network, in contrast to working alone with expert information. Calibrating the model for each person, we find that some people are predicted with startling precision.

Keywords: Decision making; Virtual social network; Emotional economic choice; Neural model (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:101:y:2022:i:c:s221480432200115x

DOI: 10.1016/j.socec.2022.101944

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