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Rational Irrationality and Group Size: The Effect of Biased Beliefs on Individual Contributions Towards Collective Goods

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  • Andreas P. Kyriacou

Abstract

The price of irrationality or belief manipulation varies as we move from small to large group settings. Individual members of large groups can more cheaply bias downwards their beliefs as to the immorality of their free-riding thereby circumventing internal moral constraints. The relative anonymity inherent to large number settings moreover reduces social pressures against free‐riding stemming from some common ethical or moral norms. Both selfish individuals facing an internal moral constraint to behave altruistically and those with altruistic preferences have an incentive to bias upward their belief of the decisiveness of their contribution in large number settings. In addition, the impact of symmetry and the illusion of control can introduce biases regarding the expected reactions of others to one's own decisions. The loosening of moral constraints will tend to increase free‐rider behavior while biased beliefs about the decisiveness of one's contribution or the reaction of others to one's actions will tend to decrease such behavior.

Suggested Citation

  • Andreas P. Kyriacou, 2011. "Rational Irrationality and Group Size: The Effect of Biased Beliefs on Individual Contributions Towards Collective Goods," American Journal of Economics and Sociology, Wiley Blackwell, vol. 70(1), pages 109-130, January.
    • Handle: RePEc:bla:ajecsc:v:70:y:2011:i:1:p:109-130
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    File URL: http://hdl.handle.net/10.1111/j.1536-7150.2010.00765.x
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