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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.

Suggested Citation

  • Dirk Engelmann & Martin Strobel, 2004. "The False Consensus Effect: Deconstruction and Reconstruction of an Anomaly," CERGE-EI Working Papers wp233, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp233
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    References listed on IDEAS

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    1. van der Heijden, E.C.M. & Nelissen, J.H.M. & Potters, J.J.M., 2004. "Opinions on Tax Deductions and the Consensus Effect in a Survey-Experiment," Other publications TiSEM bfdc07b3-23bf-4cda-a92a-5, Tilburg University, School of Economics and Management.
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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, vol. 155(2), pages 141-159, June.
    2. Borgsen, Sina & Weber, Martin, 2007. "False consensus and the role of ambiguity in predictions of others risky preferences," Papers 07-46, Sonderforschungsbreich 504.
    3. van der Heijden, E.C.M. & Nelissen, J.H.M. & Potters, J.J.M., 2004. "Opinions on Tax Deductions and the Consensus Effect in a Survey-Experiment," Other publications TiSEM bfdc07b3-23bf-4cda-a92a-5, Tilburg University, School of Economics and Management.
    4. George Loewenstein & Don Moore & Roberto Weber, 2006. "Misperceiving the value of information in predicting the performance of others," Experimental Economics, Springer;Economic Science Association, vol. 9(3), pages 281-295, September.
    5. 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, vol. 18(2), pages 229-239, June.

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    More about this item

    Keywords

    False Consensus; Information Processing; Anomalies; Experimental Economics.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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