Wednesday, May 26, 2010

Conformity, Proportion, and the Wisdom of Crowds

Thaler and Sunstein note that many people tend to follow the crowd, even when at their reflective best they know better. When Solomon Asch's conformity experiments are tried around the world, 20 - 40% of people will go along with the crowd of the experimenter's secret collaborators even when they can see that the crowd is wrong.

Thaler and Sunstein conclude that this fact means we should adjust our choice architecture to help people resist being improperly swayed by the crowd. One way to do this is to show that when people think "everyone is doing it" the real proportions are quite different. Knowing that a number of others go their own way - even if only a minority - gives courage to those who want to follow their instincts or values, but don't want to be too deviant. And showing the true proportions of anything in a whole population is beyond what anyone can know from just looking around. For true proportions you need sociology.

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