Visibility bias in the transmission of consumption beliefs and undersaving
| Authors | Han, Hirshleifer, Walden |
| Year | 2019 |
| Type | Working Paper |
| Abstract | We model visibility bias in the social transmission of consumption behavior. When consumption is more salient than non-consumption, people perceive that others are consuming heavily, and infer that future prospects are favorable. This increases aggregate consumption in a positive feedback loop. A distinctive implication is that disclosure policy interventions can ameliorate undersaving. In contrast with wealth-signaling models, information asymmetry about wealth reduces overconsumption. The model predicts that saving is influenced by social connectedness, observation biases, and demographic structure; and provides a novel explanation for the dramatic drop in savings rates in the US and several other countries in recent decades. |
| URL | https://www.nber.org/papers/w25566 |
| Tags | Propagation of Noise / Undesirable Outcomes | Social Transmission Biases | Theory |
The self-presentational consequences of upholding one's stance in spite of the evidence
| Authors | John, Jeong, Gino, Huang |
| Journal | Organizational Behavior and Human Decision Processes |
| Year | 2019 |
| Type | Published Paper |
| Abstract | Five studies explore the self-presentational consequences of refusing to "back down" -- that is, upholding a stance despite evidence of its inaccuracy. Using data from an entrepreneurial pitch competition, Study 1 shows that entrepreneurs tend not to back down even though investors are more impressed by entrepreneurs who do. Next, in two sets of experiments, we unpack the psychology underlying why actors refuse to publicly back down and investigate observers' impressions of those actors. Specifically, we show that observers view people who refuse to back down as confident but unintelligent, and these perceptions drive consequential decisions about such refusers, such as whether to invest in their ideas (Studies 1 & 2) or whether to hire them (Study 3). Although actors can intuit these effects (Study 4), this understanding is not reflected in their behavior because they are concerned with saving face (Study 5). |
| Keywords | Self-presentation, belief perseverance, judgment, confidence, persuasion |
| URL | https://doi.org/10.1016/j.obhdp.2019.07.001 |
| Tags | Experimental / Survey-Based Empirical | Investment Decisions (Institutional) | Manager / Firm Behavior | Social Transmission Biases |
Not close enough for comfort: Facebook users eschew high intimacy negative disclosures
| Authors | Saling, Cohen, Cooper |
| Journal | Personality and Individual Differences |
| Year | 2019 |
| Type | Published Paper |
| Abstract | Facebook is a ubiquitous platform for self-disclosure; however, norms associated with online and offline disclosure appear to differ. The present study investigated whether people's disposition to disclose and comfort with others' disclosures of negatively-valenced content differs online and offline. Additionally, psychological predictors of offline and online disclosure were explored. Results revealed that offline disclosure of negatively-valenced personal information is preferred to online disclosure and that comfort with others' disclosure of such information is greater offline than online. As information becomes more sensitive, the likelihood of sharing this information online decreases; similarly, the degree of comfort with others' online disclosure of such information decreases. Agreeableness was positively correlated with reactions to others' online posts. Agreeableness, openness, self-esteem and emotional stability were positively correlated with comfort with others' offline disclosures. Tendency to disclose online was higher for those with low emotional stability and low openness (but only for some scenarios). Age effects were most prominent with respect to the information shared and comfort with others' disclosures, but across age groups there was a preference for offline, rather than online, sharing. Collectively, the results reveal that individual differences are weaker predictors of online disclosure than the nature of information disclosed. |
| Keywords | Facebook, personality, self-esteem, self-disclosure, audience effects, age |
| URL | https://doi.org/10.1016/j.paid.2019.01.028 |
| Tags | Experimental / Survey-Based Empirical | Social Transmission Biases |
Narrative economics: how stories go viral and drive major economic events
| Authors | Shiller |
| Book | Narrative Economics |
| Year | 2019 |
| Type | Book |
| Abstract | Stories people tell-about financial confidence or panic, housing booms, or Bitcoin-can go viral and powerfully affect economies, but such narratives have traditionally been ignored in economics and finance because they seem anecdotal and unscientific. In this groundbreaking book, Robert Shiller explains why we ignore these stories at our peril-and how we can begin to take them seriously. Using a rich array of examples and data, Shiller argues that studying popular stories that influence individual and collective economic behavior-what he calls "narrative economics"-may vastly improve our ability to predict, prepare for, and lessen the damage of financial crises and other major economic events. The result is nothing less than a new way to think about the economy, economic change, and economics. In a new preface, Shiller reflects on some of the challenges facing narrative economics, discusses the connection between disease epidemics and economic epidemics, and suggests why epidemiology may hold lessons for fighting economic contagions. |
| Keywords | COVID-19, coronavirus, H1N1, Wuhan, Spanish flu, Spanish influenza, influenza, Ebola polio disease, 1918 flu epidemic, Great Recession, 1929 financial epidemic, pandemic, co-epidemic, contagion, market meltdown, stock crash, bubble, panic, epidemiology, world financial crisis, virality, disease, stimulus, fear, bank runs, bank failures, behavioral economics, consumer confidence, crowd psychology, crisis of confidence, crisis, mutation, conspiracy theories, fake news, false narratives, chaos theory, butterfly effect, John Maynard Keynes |
| URL | https://doi.org/10.1515/9780691212074 |
| Tags | Archival Empirical | Asset Pricing, Trading Volume and Market Efficiency | Evolutionary Finance | Financing- and Investment Decisions (Individual) | Investment Decisions (Institutional) | Manager / Firm Behavior | Propagation of Noise / Undesirable Outcomes | Social Transmission Biases |
Social and cultural issues in finance
| Authors | Cronqvist |
| Journal | Journal of Financial and Quantitative Analysis |
| Year | 2018 |
| Type | Published Paper | Literature Review Paper |
| Keywords | Social networks, social capital, social preferences, financial decision, asset pricing, corporate governance |
| URL | https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/virtual-special-issues/jfqa-virtual-issue-2 |
| Tags | Asset Pricing, Trading Volume and Market Efficiency | Financing- and Investment Decisions (Individual) | Investment Decisions (Institutional) | Manager / Firm Behavior | Propagation of Noise / Undesirable Outcomes | Social Network Structure | Social Transmission Biases | Theory |
Humblebragging: A distinct-and ineffective-self-presentation strategy
| Authors | Sezer, Gino, Norton |
| Journal | Journal of Personality and Social Psychology |
| Year | 2018 |
| Type | Published Paper |
| Abstract | Self-presentation is a fundamental aspect of social life, with myriad critical outcomes dependent on others' impressions. We identify and offer the first empirical investigation of a prevalent, yet understudied, self-presentation strategy: humblebragging. Across 9 studies, including a week-long diary study and a field experiment, we identify humblebragging-bragging masked by a complaint or humility-as a common, conceptually distinct, and ineffective form of self-presentation. We first document the ubiquity of humblebragging across several domains, from everyday life to social media. We then show that both forms of humblebragging-complaint-based or humility-based--are less effective than straightforward bragging, as they reduce liking, perceived competence, compliance with requests, and financial generosity. Despite being more common, complaint-based humblebrags are less effective than humility-based humblebrags, and are even less effective than simply complaining. We show that people choose to deploy humblebrags particularly when motivated to both elicit sympathy and impress others. Despite the belief that combining bragging with complaining or humility confers the benefits of each strategy, we find that humblebragging confers the benefits of neither, instead backfiring because it is seen as insincere. |
| Keywords | Humblebragging, impression management, self-presentation, interpersonal perception, sincerity |
| URL | https://doi.org/10.1037/pspi0000108 |
| Tags | Experimental / Survey-Based Empirical | Social Transmission Biases |
The spread of true and false news online
| Authors | Vosoughi, Roy, Aral |
| Journal | Science |
| Year | 2018 |
| Type | Published Paper |
| Abstract | We investigated the differential diffusion of all of the verified true and false news stories distributed on Twitter from 2006 to 2017. The data comprise ~126,000 stories tweeted by ~3 million people more than 4.5 million times. We classified news as true or false using information from six independent fact-checking organizations that exhibited 95 to 98% agreement on the classifications. Falsehood diffused significantly farther, faster, deeper, and more broadly than the truth in all categories of information, and the effects were more pronounced for false political news than for false news about terrorism, natural disasters, science, urban legends, or financial information. We found that false news was more novel than true news, which suggests that people were more likely to share novel information. Whereas false stories inspired fear, disgust, and surprise in replies, true stories inspired anticipation, sadness, joy, and trust. Contrary to conventional wisdom, robots accelerated the spread of true and false news at the same rate, implying that false news spreads more than the truth because humans, not robots, are more likely to spread it. |
| URL | https://doi.org/10.1007/978-981-16-3398-0_15 |
| Tags | Archival Empirical | Media and Textual Analysis | Propagation of Noise / Undesirable Outcomes | Social Transmission Biases |
It doesn't hurt to ask: Question-asking increases liking
| Authors | Huang, Yeomans, Brooks, Minson, Gino |
| Journal | Journal of Personality and Social Psychology |
| Year | 2017 |
| Type | Published Paper |
| Abstract | Conversation is a fundamental human experience that is necessary to pursue intrapersonal and interpersonal goals across myriad contexts, relationships, and modes of communication. In the current research, we isolate the role of an understudied conversational behavior: question-asking. Across 3 studies of live dyadic conversations, we identify a robust and consistent relationship between question-asking and liking: people who ask more questions, particularly follow-up questions, are better liked by their conversation partners. When people are instructed to ask more questions, they are perceived as higher in responsiveness, an interpersonal construct that captures listening, understanding, validation, and care. We measure responsiveness with an attitudinal measure from previous research as well as a novel behavioral measure: the number of follow-up questions one asks. In both cases, responsiveness explains the effect of question-asking on liking. In addition to analyzing live get-to-know-you conversations online, we also studied face-to-face speed-dating conversations. We trained a natural language processing algorithm as a "follow-up question detector" that we applied to our speed-dating data (and can be applied to any text data to more deeply understand question-asking dynamics). The follow-up question rate established by the algorithm showed that speed daters who ask more follow-up questions during their dates are more likely to elicit agreement for second dates from their partners, a behavioral indicator of liking. We also find that, despite the persistent and beneficial effects of asking questions, people do not anticipate that question-asking increases interpersonal liking. |
| URL | https://doi.org/10.1037/pspi0000097 |
| Tags | Experimental / Survey-Based Empirical | Social Transmission Biases |
How language shapes word of mouth's impact
| Authors | Packard, Berger |
| Journal | Journal of Marketing Research |
| Year | 2017 |
| Type | Published Paper |
| Abstract | Word of mouth affects consumer behavior, but how does the language used in word of mouth shape that impact? Might certain types of consumers be more likely to use certain types of language, affecting whose words have more influence? Five studies, including textual analysis of more than 1,000 online reviews, demonstrate that compared to more implicit endorsements (e.g., "I liked it," "I enjoyed it"), explicit endorsements (e.g., "I recommend it") are more persuasive and increase purchase intent. This occurs because explicit endorsers are perceived to like the product more and have more expertise. Looking at the endorsement language consumers actually use, however, shows that while consumer knowledge does affect endorsement style, its effect actually works in the opposite direction. Because novices are less aware that others have heterogeneous product preferences, they are more likely to use explicit endorsements. Consequently, the endorsement styles novices and experts tend to use may lead to greater persuasion by novices. These findings highlight the important role that language, and endorsement styles in particular, plays in shaping the effects of word of mouth. |
| Keywords | Word of mouth, language, persuasion, consumer knowledge, social perception |
| URL | https://doi.org/10.1509/jmr.15.0248 |
| Tags | Archival Empirical | Consumer Decisions | Media and Textual Analysis | Social Transmission Biases |
Peer pressure: Social interaction and the disposition effect
| Authors | Heimer |
| Journal | The Review of Financial Studies |
| Year | 2016 |
| Type | Published Paper |
| Abstract | Social interaction contributes to some traders' disposition effect. New data from an investment-specific social network linked to individual-level trading records builds evidence of this connection. To credibly estimate causal peer effects, I exploit the staggered entry of retail brokerages into partnerships with the social trading web platform and compare trader activity before and after exposure to these new social conditions. Access to the social network nearly doubles the magnitude of a trader's disposition effect. Traders connected in the network develop correlated levels of the disposition effect, a finding that can be replicated using workhorse data from a large discount brokerage. |
| URL | https://econpapers.repec.org/article/ouprfinst/v_3a29_3ay_3a2016_3ai_3a11_3ap_3a3177-3209..htm |
| Tags | Archival Empirical | Asset Pricing, Trading Volume and Market Efficiency | Experimental / Survey-Based Empirical | Financing- and Investment Decisions (Individual) | Propagation of Noise / Undesirable Outcomes | Social Network Structure | Social Transmission Biases |
The positivity bias and prosocial deception on facebook
| Authors | Spottswood, Hancock |
| Journal | Computers in Human Behavior |
| Year | 2016 |
| Type | Published Paper |
| Abstract | Can the positivity bias, observed across various Social Network Sites (SNSs), predict the use of prosocial lies in a SNS such as Facebook? The positivity bias may be a product of politeness norms (i.e., positive face concern) that have influenced communication phenomena before these sites existed. In addition, positive face concern may also be affected by unconscious cues or primes that promote prosocial behavior on Facebook. We conducted an online experiment using current Facebook users to examine how positive face concern and surveillance primes affect prosocial lying in public and private Facebook contexts. Although positive face concern and publicness predicted the use of prosocial lying, positive face concern was not affected by the publicness and surveillance primes did not affect positive face concern or the use of prosocial lies in our study. This hints towards the nuance of positive face concern and the potential limitations of surveillance primes on prosocial lying behavior. |
| Keywords | Facebook, deception, positive face, surveillance primes |
| URL | https://doi.org/10.1016/j.chb.2016.08.019 |
| Tags | Experimental / Survey-Based Empirical | Media and Textual Analysis | Social Transmission Biases |
Suspense and surprise
| Authors | Ely, Frankel, Kamenica |
| Journal | Journal of Political Economy |
| Year | 2015 |
| Type | Published Paper |
| Abstract | We model demand for noninstrumental information, drawing on the idea that people derive entertainment utility from suspense and surprise. A period has more suspense if the variance of the next period's beliefs is greater. A period has more surprise if the current belief is further from the last period's belief. Under these definitions, we analyze the optimal way to reveal information over time so as to maximize expected suspense or surprise experienced by a Bayesian audience. We apply our results to the design of mystery novels, political primaries, casinos, game shows, auctions, and sports. |
| URL | https://www.journals.uchicago.edu/doi/full/10.1086/677350 |
| Tags | Consumer Decisions | Financing- and Investment Decisions (Individual) | Investment Decisions (Institutional) | Manager / Firm Behavior | Social Transmission Biases | Theory |
Facebook finance: How social interaction propagates active investing
| Authors | Heimer, Simon |
| Year | 2015 |
| Type | Working Paper |
| Abstract | This paper shows how active investing strategies propagate through social connections in a network of retail traders, using a new database of social activity linked to individual-level trading records. A trader's good short-term performance causes them to contact others. A trader's activity increases when peers perform well and increase communication. We use the staggered entry of brokerages into partnerships with the social networking platform, which is a necessary precursor for traders to access the network, to argue these effects are causal. This pattern of communication supports active trading, even though the network reveals the low success rate of retail traders. |
| URL | https://EconPapers.repec.org/RePEc:fip:fedcwp:1522 |
| Tags | Archival Empirical | Financing- and Investment Decisions (Individual) | Social Transmission Biases |
News, politics, and negativity
| Authors | Soroka, McAdams |
| Journal | Political Communication |
| Year | 2015 |
| Type | Published Paper |
| Abstract | Work in political communication has discussed the ongoing predominance of negative news, but has offered few convincing accounts for this focus. A growing body of literature shows that humans regularly pay more attention to negative information than to positive information, however. This article argues that we should view the nature of news content in part as a consequence of this asymmetry bias observed in human behavior. A psychophysiological experiment capturing viewers' reactions to actual news content shows that negative news elicits stronger and more sustained reactions than does positive news. Results are discussed as they pertain to political behavior and communication, and to politics and political institutions more generally. |
| Keywords | Negativity bias, mass media, political communication, psychophysiology |
| URL | https://doi.org/10.1080/10584609.2014.881942 |
| Tags | Consumer Decisions | Experimental / Survey-Based Empirical | Media and Textual Analysis | Social Transmission Biases |
Broadcasting and narrowcasting: How audience size affects what people share
| Authors | Barasch, Berger |
| Journal | Journal of Marketing Research |
| Year | 2014 |
| Type | Published Paper |
| Abstract | Does the number of people with whom someone communicates influence what he or she discusses and shares? Six studies demonstrate that compared with narrowcasting (i.e., communicating with just one person), broadcasting (i.e., communicating with multiple people) leads consumers to avoid sharing content that makes them look bad. Narrowcasting, however, encourages people to share content that is useful to the message recipient. These effects are driven by communicators' focus of attention. People naturally tend to focus on the self, but communicating with just one person heightens other-focus, which leads communicators to share less self-presenting content and more useful content. These findings shed light on the drivers of word of mouth and provide insight into when the communication sender (vs. receiver) plays a relatively larger role in what people share. |
| Keywords | Word of mouth, self-presentation, self-focus, other-focus, audience size |
| URL | https://doi.org/10.1509/jmr.13.0238 |
| Tags | Experimental / Survey-Based Empirical | Social Transmission Biases |
Word of mouth and interpersonal communication: A review and directions for future research
| Authors | Berger |
| Journal | Journal of Consumer Psychology |
| Year | 2014 |
| Type | Published Paper | Literature Review Paper |
| Abstract | People often share opinions and information with their social ties, and word of mouth has an important impact on consumer behavior. But what drives interpersonal communication and why do people talk about certain things rather than others? This article argues that word of mouth is goal driven and serves five key functions (i.e., impression management, emotion regulation, information acquisition, social bonding, and persuasion). Importantly, I suggest these motivations are predominantly self- (rather than other) serving and drive what people talk about even without their awareness. Further, these drivers make predictions about the types of news and information people are most likely to discuss. This article reviews the five proposed functions and well as how contextual factors (i.e., audience and communication channel) may moderate which functions play a larger role. Taken together, the paper provides insight into the psychological factors that shape word of mouth and outlines additional questions that deserve further study. |
| URL | https://doi.org/10.1016/j.jcps.2014.05.002 |
| Tags | Archival Empirical | Consumer Decisions | Experimental / Survey-Based Empirical | Media and Textual Analysis | Social Transmission Biases |
Consumer demand for cynical and negative news frames
| Authors | Trussler, Soroka |
| Journal | International Journal of Press/Politics |
| Year | 2014 |
| Type | Published Paper |
| Abstract | Commentators regularly lament the proliferation of both negative and/or strategic ("horse race") coverage in political news content. The most frequent account for this trend focuses on news norms and/or the priorities of news journalists. Here, we build on recent work arguing for the importance of demand-side, rather than supply-side, explanations of news content. In short, news may be negative and/or strategy-focused because that is the kind of news that people are interested in. We use a lab study to capture participants' news-selection biases, alongside a survey capturing their stated news preferences. Politically interested participants are more likely to select negative stories. Interest is associated with a greater preference for strategic frames as well. And results suggest that behavioral results do not conform to attitudinal ones. That is, regardless of what participants say, they exhibit a preference for negative news content. |
| Keywords | Negative news, strategy news, negativity bias, horse race, consumer demand, experimental design, gatekeeping |
| URL | https://doi.org/10.1177/1940161214524832 |
| Tags | Experimental / Survey-Based Empirical | Media and Textual Analysis | Social Transmission Biases |
Temporal contiguity and negativity bias in the impact of online word of mouth
| Authors | Chen, Lurie |
| Journal | Journal of Marketing Research |
| Year | 2013 |
| Type | Published Paper |
| Abstract | Prior research shows that positive online reviews are less valued than negative reviews. The authors argue that this is due to differences in causal attributions for positive versus negative information such that positive reviews tend to be relatively more attributed to the reviewer (vs. product experience) than negative reviews. The presence of temporal contiguity cues, which indicate that review writing closely follows consumption, reduces the relative extent to which positive reviews are attributed to the reviewer and mitigates the negativity bias. An examination of 65,531 Yelp.com restaurant reviews shows that review value is negatively related to review valence but that this negative relationship is absent for reviews that contain temporal contiguity cues. A series of lab studies replicates these findings and suggests that temporal contiguity cues enhance the value of a positive review and increase the likelihood of choosing a product with a positive review by changing reader beliefs about the cause of the review. |
| Keywords | Word of mouth, negativity bias, temporal contiguity, causal attributions |
| URL | https://doi.org/10.1509/jmr.12.0063 |
| Tags | Archival Empirical | Consumer Decisions | Experimental / Survey-Based Empirical | Social Transmission Biases |
Creating buzz: The neural correlates of effective message propagation
| Authors | Falk, Morelli, Welbourne, Dambacher, Lieberman |
| Journal | Psychological Science |
| Year | 2013 |
| Type | Published Paper |
| Abstract | Social interaction promotes the spread of values, attitudes, and behaviors. Here we report on neural responses to ideas that are destined to spread. Message communicators were scanned using fMRI during their initial exposure to the to-be-communicated ideas. These message communicators then had the opportunity to spread the messages and their corresponding subjective evaluations to message recipients, outside the scanner. Successful ideas were associated with neural responses in the mentalizing system and the reward system when first heard, prior to spreading them. Similarly, individuals more able to spread their own views to others produced greater mentalizing system activity during initial encoding. Unlike prior social influence studies that focus on those being influenced, this investigation focused on the brains of influencers. Successful social influence is reliably associated with an influencer-tobe's state of mind when first encoding ideas. |
| Keywords | Social influence, mass media, social interaction, social behavior, neuroimaging |
| URL | https://doi.org/10.1177/0956797612474670 |
| Tags | Experimental / Survey-Based Empirical | Social Transmission Biases |
On braggarts and gossips: A self-enhancement account of word-of-mouth generation and transmission
| Authors | Angelis, Bonezzi, Peluso, Rucker, Costabile |
| Journal | Journal of Marketing Research |
| Year | 2012 |
| Type | Published Paper |
| Abstract | Previous research on word of mouth (WOM) has presented inconsistent evidence on whether consumers are more inclined to share positive or negative information about products and services. Some findings suggest that consumers are more inclined to engage in positive WOM, whereas others suggest that consumers are more inclined to engage in negative WOM. The present research offers a theoretical perspective that provides a means to resolve these seemingly contradictory findings. Specifically, the authors compare the generation of WOM (i.e., consumers sharing information about their own experiences) with the transmission of WOM (i.e., consumers passing on information about experiences they heard occurred to others). They suggest that a basic human motive to self-enhance leads consumers to generate positive WOM (i.e., share information about their own positive consumption experiences) but transmit negative WOM (i.e., pass on information they heard about others' negative consumption experiences). The authors present evidence for self-enhancement motives playing out in opposite ways for WOM generation versus WOM transmission across four experiments. |
| Keywords | Word-of-mouth valence, word-of-mouth generation, word-of-mouth transmission, self-enhancement |
| URL | https://doi.org/10.1509/jmr.11.0136 |
| Tags | Experimental / Survey-Based Empirical | Social Transmission Biases |