An Experimental Study of Persuasion Bias and Social Influence in Networks

• Authors: Jordi Brandts.
• BSE Working Paper: 110308 | September 15
• Keywords: experiments , bounded rationality , persuasion bias
• JEL codes: C92, D03, D83
• experiments
• bounded rationality
• persuasion bias

In many areas of social life, individuals receive information about a particular issue of interest from multiple sources. When these sources are connected through a network, then proper aggregation of this information by an individual involves taking into account the structure of this network. The inability to aggregate properly may lead to various types of distortions. In our experiment, four agents all want to find out the value of a particular parameter unknown to all. Agents receive private signals about the parameter and can communicate their estimates of the parameter repeatedly through a network, the structure of which is known by all players. We present results from experiments with three different networks. We find that the information of agents who have more outgoing links in a network gets more weight in the information aggregation of the other agents than under optimal updating. Our results are consistent with the model of “persuasion bias” of DeMarzo et al. (2003).