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Opinion Dynamics and Wisdom under Conformity

  • Berno Buechel

    (Department of Economics, University of Hamburg)

  • Tim Hellmann

    (Institute of Mathematical Economics, Bielefeld University)

  • Stefan Kölßner

    (Statistics and Econometrics, Saarland University)

We study a dynamic model of opinion formation in social networks. In our model, boundedly rational agents update opinions by averaging over their neighbors' expressed opinions, but may misrepresent their own opinion by conforming or counter-conforming with their neighbors. We show that an agent's social influence on the long-run group opinion is increasing in network centrality and decreasing in conformity. Concerning efficiency of information aggregation or “wisdom" of the society, it turns out that misrepresentation of opinions need not undermine wisdom, but may even enhance it. Given the network, we provide the optimal distribution of conformity levels in the society and show which agents should be more conforming in order to increase wisdom.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2014.51.

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Date of creation: May 2014
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Handle: RePEc:fem:femwpa:2014.51
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