The False Consensus Effect: Deconstruction and Reconstruction of an Anomaly
CERGE-EI Working Paper No. 233
37 Pages Posted: 13 Nov 2005
Date Written: August 2004
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: Suggested Citation