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Preferences and Social Influence

Author

Listed:
  • Chaim Fershtman

    (Tel Aviv University)

  • Uzi Segal

    (Boston College)

Abstract

Interaction between decision makers may affect their preferences. We consider a setup in which each individual is characterized by two sets of preferences: his unchanged core preferences and his behavioral preferences. Each individual has a social influence function that determines his behavioral preferences given his core preferences and the behavioral preferences of other individuals in his group. Decisions are made according to behavioral preferences. The paper considers different properties of these social influence functions and their effect on equilibrium behavior. We illustrate the applicability of our model by considering decision making by a committee that has a deliberation stage prior to voting.

Suggested Citation

  • Chaim Fershtman & Uzi Segal, 2016. "Preferences and Social Influence," Boston College Working Papers in Economics 912, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:912
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    Cited by:

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    2. Catalina Canals & Eric Goles & Aldo Mascareño & Sergio Rica & Gonzalo A. Ruz, 2018. "School Choice in a Market Environment: Individual versus Social Expectations," Complexity, Hindawi, vol. 2018, pages 1-11, December.
    3. Carrasco, Jose A. & Harrison, Rodrigo & Villena, Mauricio G., 2022. "Strategic reciprocity and preference formation," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 368-381.
    4. Yusufcan Demirkan & Boyao Li, 2023. "Individual choice under social influence," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(2), pages 585-606, August.
    5. Chaim Fershtman & Uzi Segal, 2020. "Social Influence in Legal Deliberations," Boston College Working Papers in Economics 999, Boston College Department of Economics, revised 12 Sep 2021.
    6. Ahsanuzzaman, & Priyo, Asad Karim Khan & Nuzhat, Kanti Ananta, 2022. "Effects of communication, group selection, and social learning on risk and ambiguity attitudes: Experimental evidence from Bangladesh," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    7. Ahsanuzzaman, & Palm-Forster, Leah H. & Suter, Jordan F., 2022. "Experimental evidence of common pool resource use in the presence of uncertainty," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 139-160.
    8. Dwenger, Nadja & Treber, Lukas, 2018. "Shaming for Tax Enforcement: Evidence from a New Policy," CEPR Discussion Papers 13194, C.E.P.R. Discussion Papers.
    9. Shi, Leilei & Wang, Binghong & Guo, Xinshuai & Li, Honggang, 2021. "A price dynamic equilibrium model with trading volume weights based on a price-volume probability wave differential equation," International Review of Financial Analysis, Elsevier, vol. 74(C).
    10. Alon, Shiri & Lehrer, Ehud, 2020. "Subjective utilitarianism: Individual decisions in a social context," Journal of Economic Theory, Elsevier, vol. 190(C).

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    More about this item

    Keywords

    Risk aversion; social influence; behavioral preferences;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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