The False Consensus Effect: Deconstruction and Reconstruction of an Anomaly

CERGE-EI Working Paper No. 233

37 Pages Posted: 13 Nov 2005

See all articles by Dirk Engelmann

Dirk Engelmann

University of London - Royal Holloway - Department of Economics

Martin Strobel

Maastricht University - Department of Economics; Maastricht University - International Institute of Infonomics

Date Written: August 2004

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 e¤ect 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 the information retrieval and that the underlying mechanism is an information processing defficiency rather than egocentricity. Moreover, we discuss the potential relevance of our findings for other well-known effects like the winner's curse and overconfidence.

Keywords: False Consensus, Information Processing, Anomalies, Experimental Economics

JEL Classification: C91, D83, D84

Suggested Citation

Engelmann, Dirk and Strobel, Martin, The False Consensus Effect: Deconstruction and Reconstruction of an Anomaly (August 2004). CERGE-EI Working Paper No. 233, Available at SSRN: https://ssrn.com/abstract=841885 or http://dx.doi.org/10.2139/ssrn.841885

Dirk Engelmann (Contact Author)

University of London - Royal Holloway - Department of Economics ( email )

Egham, TW20 0EX
United Kingdom

Martin Strobel

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 (0)43 38-83646 (Phone)
+31 (0)43 38-84878 (Fax)

HOME PAGE: http://Martin.Strobel.infonomics.nl

Maastricht University - International Institute of Infonomics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 (0)43 38-83885 (Phone)
+31 (0)43 38-84905 (Fax)

HOME PAGE: http://Martin.Strobel.infonomics.nl

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