The Effect of Anchors and Social Information on Behaviour

43 Pages Posted: 24 Aug 2019

See all articles by Tanya O'Garra

Tanya O'Garra

Economics Department, Middlesex University

Matthew Sisco

Columbia University - Center for Research on Environmental Decisions

Date Written: June 1 24, 2019

Abstract

We use a ‘multi-player dictator game’ (MDG) with ‘social information’ about the contribution decision about a previous dictator to examine whether average contributions as well as the behavioural strategy adopted are affected by the first amount presented (the ‘anchor’) using a sequential strategy elicitation method. We find that average contributions are positively affected by the anchor. The anchor is also found to influence the behavioural strategy that individuals adopt, such that low anchors significantly increase the likelihood that players will adopt unconditional self-interested strategies, whereas high anchors increase the likelihood of adopting giving strategies. The distribution of strategies – and hence, the distribution of behavioural ‘types’ - is therefore affected by the initial conditions of play, lending support to the notion that behavioural strategies are context dependent.

Keywords: anchoring; social information; dictator game; heterogeneity; redistribution

JEL Classification: C91, C72, D31, D64, D91

Suggested Citation

O'Garra, Tanya and Sisco, Matthew, The Effect of Anchors and Social Information on Behaviour (June 1 24, 2019). Available at SSRN: https://ssrn.com/abstract=3442224 or http://dx.doi.org/10.2139/ssrn.3442224

Tanya O'Garra (Contact Author)

Economics Department, Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Matthew Sisco

Columbia University - Center for Research on Environmental Decisions ( email )

419 Schermerhorn Hall
1190 Amsterdam Ave
New York, NY 10027
United States

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