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Social Influence and Position Effects

Marisa Hidalgo-Hidalgo (), Natalia Jiménez () and Dunia López-Pintado ()
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Dunia López-Pintado: Universidad Pablo de Olavide

No 19.03, Working Papers from Universidad Pablo de Olavide, Department of Economics

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.

Keywords: social influence; ranking; online searching; lab experiments. (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2019-01
New Economics Papers: this item is included in nep-cbe and nep-exp
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