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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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    References listed on IDEAS

    as
    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    2. Ariely, Dan & Levav, Jonathan, 2000. "Sequential Choice in Group Settings: Taking the Road Less Traveled and Less Enjoyed," Journal of Consumer Research, Oxford University Press, vol. 27(3), pages 279-290, December.
    3. Kusiak, Andrew & Li, Mingyang, 2009. "Optimal decision making in ventilation control," Energy, Elsevier, vol. 34(11), pages 1835-1845.
    4. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    5. Li Hao & Wing Suen, 2009. "Viewpoint: Decision-making in committees," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 359-392, May.
    6. Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, vol. 77(4), pages 593-604, September.
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    Cited by:

    1. Abhinash Borah & Christopher Kops, 2019. "Rational choices: an ecological approach," Theory and Decision, Springer, vol. 86(3), pages 401-420, May.
    2. Catalina Canals & Eric Goles & Aldo MascareƱo & Sergio Rica & Gonzalo A. Ruz, 2018. "School Choice in a Market Environment: Individual versus Social Expectations," Complexity, Hindawi, vol. 2018, pages 1-11, December.

    More about this item

    Keywords

    Risk aversion; social influence; behavioral preferences;

    JEL classification:

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

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