Decision-Making Under Social Pressure: The Political Economy of Debating Socially Sensitive Issues

34 Pages Posted: 9 Nov 2000

See all articles by Felix Oberholzer-Gee

Felix Oberholzer-Gee

Harvard Business School, Strategy Unit

Howard Kunreuther

University of Pennsylvania - Operations, Information and Decisions Department; National Bureau of Economic Research (NBER)

Date Written: September 2000

Abstract

Policy-makers often rely on public opinion polls to decide which political projects to pursue. We study how the use of opinion polls influences policy outcomes if respondents feel pressured to offer "socially desirable" views when answering the pollster's questions. Our results indicate that this type of social pressure leads to second-best policy outcomes even if politicians are aware of the bias. The context for the empirical part of our study is the siting of a radioactive waste repository in Pennsylvania. We model the local politicians' decision to support this facility as guided by economic concerns and by social pressure. We find that social pressure is critical for an explanation of local policy-making.

JEL Classification: D72, D78, H7

Suggested Citation

Oberholzer-Gee, Felix and Kunreuther, Howard C., Decision-Making Under Social Pressure: The Political Economy of Debating Socially Sensitive Issues (September 2000). Available at SSRN: https://ssrn.com/abstract=243802 or http://dx.doi.org/10.2139/ssrn.243802

Felix Oberholzer-Gee (Contact Author)

Harvard Business School, Strategy Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Howard C. Kunreuther

University of Pennsylvania - Operations, Information and Decisions Department ( email )

3730 Walnut Street
558 & 559 Jon M. Huntsman Hall
Philadelphia, PA 19104-5340
United States
212-854-0423 (Phone)
215-573-2130 (Fax)

National Bureau of Economic Research (NBER)

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