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The False Consensus Effect: Deconstruction and Reconstruction of an Anomaly

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  • Dirk Engelmann
  • Martin Strobel

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 the information retrieval and that the underlying mechanism is an information processing defficiency rather than egocentricity. Moreover, we discuss the potential relevance of our findings for other well-known effects like the winner’s curse and overconfidence.

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Bibliographic Info

Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp233.

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Date of creation: Sep 2004
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Handle: RePEc:cer:papers:wp233

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Related research

Keywords: False Consensus; Information Processing; Anomalies; Experimental Economics.;

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References

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  1. Engelmann, Dirk & Strobel, Martin, 1999. "The false consensus effect disappears if representative information and monetary incentives are given," SFB 373 Discussion Papers, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes 1999,66, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  2. Charness, Gary B & Grosskopf, Brit, 2000. "Relative Payoffs And Happiness: An Experimental Study," University of California at Santa Barbara, Economics Working Paper Series qt8389x8z2, Department of Economics, UC Santa Barbara.
  3. Selten, Reinhard & Ockenfels, Axel, 1998. "An experimental solidarity game," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 34(4), pages 517-539, March.
  4. Heijden, E.C.M. van der & Nelissen, J.H.M. & Potters, J.J.M., 2004. "Opinions on Tax Deductions and the Consensus Effect in a Survey-Experiment," Discussion Paper, Tilburg University, Center for Economic Research 2004-23, Tilburg University, Center for Economic Research.
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Cited by:
  1. Eline Heijden & Jan Nelissen & Jan Potters, 2007. "Opinions on the Tax Deductibility of Mortgages and the Consensus Effect," De Economist, Springer, Springer, vol. 155(2), pages 141-159, June.
  2. Borck, Rainald & Frank, Bjorn & Robledo, Julio R., 2006. "An empirical analysis of voluntary payments for information goods on the Internet," Information Economics and Policy, Elsevier, Elsevier, vol. 18(2), pages 229-239, June.

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