Deconstruction and reconstruction of an anomaly

D. Engelmann, M. Strobel

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We present a striking example of the deconstruction and reconstruction of an anomaly. In line with previous experiments we show in a one-shot setting that the allegedly robust false consensus effect disappears if representative information is readily available. But the effect reappears if a small cognitive effort is required to retrieve the information. Most subjects apparently ignore valuable information if it is not handed to them on a silver platter. We conclude that the relevance of the false consensus effect depends on the difficulty of retrieving the information and that the underlying mechanism is an information processing deficiency rather than egocentricity. Moreover, we discuss the potential relevance of our findings for other well-known effects like the winner's curse and overconfidence. 

Original languageEnglish
Pages (from-to)678-689
Number of pages12
JournalGames and Economic Behavior
Volume76
Issue number2
DOIs
Publication statusPublished - Nov 2012

Keywords

  • Anomalies
  • False consensus
  • Information processing
  • Experimental economics

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