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Deconstruction and reconstruction of an anomaly

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Author Info

  • Engelmann, Dirk
  • Strobel, Martin

Abstract

We present a striking example of the deconstruction and reconstruction of an anomaly. In line with previous experiments we show in a one-shot setting that the allegedly robust false consensus effect disappears if representative information is readily available. But the effect reappears if a small cognitive effort is required to retrieve the information. Most subjects apparently ignore valuable information if it is not handed to them on a silver platter. We conclude that the relevance of the false consensus effect depends on the difficulty of retrieving the information and that the underlying mechanism is an information processing deficiency rather than egocentricity. Moreover, we discuss the potential relevance of our findings for other well-known effects like the winnerʼs curse and overconfidence.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 76 (2012)
Issue (Month): 2 ()
Pages: 678-689

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Handle: RePEc:eee:gamebe:v:76:y:2012:i:2:p:678-689

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Anomalies; False consensus; Information processing; Experimental economics;

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References

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  1. Ellingsen, Tore & Johannesson, Magnus & Tjøtta, Sigve & Torsvik, Gaute, 2010. "Testing guilt aversion," Games and Economic Behavior, Elsevier, vol. 68(1), pages 95-107, January.
  2. Blanco, Mariana & Engelmann, Dirk & Koch, Alexander K. & Normann, Hans-Theo, 2014. "Preferences and beliefs in a sequential social dilemma: A within-subjects analysis," DICE Discussion Papers 145, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  3. Burks, Stephen V. & Carpenter, Jeffrey P. & Götte, Lorenz & Rustichini, Aldo, 2010. "Overconfidence is a Social Signaling Bias," IZA Discussion Papers 4840, Institute for the Study of Labor (IZA).
  4. Gary Charness & Brit Grosskopf, 1999. "Relative payoffs and happiness: An experimental study," Economics Working Papers 436, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000.
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  8. Jacobsen, Eva & Abdolkarim Sadrieh, 1996. "Experimental Proof for the Motivational Importance of Reciprocity," Discussion Paper Serie B 386, University of Bonn, Germany.
  9. Dirk Engelmann & Martin Strobel, 2000. "The False Consensus Effect Disappears if Representative Information and Monetary Incentives Are Given," Experimental Economics, Springer, vol. 3(3), pages 241-260, December.
  10. Tilman Slembeck & Jean-Robert Tyran, 2002. "Do Institutions Promote Rationality? An Experimental Study of the Three-Door Anomaly," University of St. Gallen Department of Economics working paper series 2002 2002-21, Department of Economics, University of St. Gallen.
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  14. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
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  16. Nikiforakis, Nikos, 2010. "Feedback, punishment and cooperation in public good experiments," Games and Economic Behavior, Elsevier, vol. 68(2), pages 689-702, March.
  17. Blanco, Mariana & Engelmann, Dirk & Koch, Alexander K. & Normann, Hans-Theo, 2008. "Belief Elicitation in Experiments: Is there a Hedging Problem?," IZA Discussion Papers 3517, Institute for the Study of Labor (IZA).
  18. Ignacio Palacios-Huerta, 2002. "Learning to Open Monty Hall's Doors," Working Papers 2002-23, Brown University, Department of Economics.
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Citations

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Cited by:
  1. Blanco, Mariana & Engelmann, Dirk & Koch, Alexander K. & Normann, Hans-Theo, 2009. "Preferences and Beliefs in a Sequential Social Dilemma: A Within-Subjects Analysis," IZA Discussion Papers 4624, Institute for the Study of Labor (IZA).
  2. Fabrizio Adriani & Silvia Sonderegger, 2013. "Trust, Trustworthiness and the Consensus Effect: An Evolutionary Approach," Discussion Papers 2013-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  3. Conzo, Pierluigi, 2014. "Trust and Cheating in Sri Lanka: The Role of Experimentally-Induced Emotions about Tsunami," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201403, University of Turin.
  4. Le Coq, Chloe & Tremewan, James & Wagner, Alexander K., 2013. "Social Centipedes: the Impact of Group Identity on Preferences and Reasoning," SITE Working Paper Series 24, Stockholm Institute of Transition Economics, Stockholm School of Economics.
  5. Proeger, Till & Meub, Lukas, 2014. "Overconfidence as a social bias: Experimental evidence," Economics Letters, Elsevier, vol. 122(2), pages 203-207.

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