Economics Seminar（2017-2）
 
Topic: Group-Shift and the Consensus Effect∗

Speaker: David Dillenberger,University of Pennsylvania
Time: Friday, March 3, 14:00-15:30
Place: Room 216, Guanghua Building 2
 
Abstract:
        Individuals often tend to conform to the choices of others in group decisions,compared to choices made in isolation, giving rise to phenomena such as group polarization and the bandwagon effect. We show that this behavior, which we term the consensus effect, is equivalent to a well-known violation of expected utility, namely strict quasi-convexity of preferences. In contrast to the equilibrium outcome when individuals are expected utility maximizers, quasi-convexity of preferences imply that group decisions may fail to properly aggregate preferences and strictly Pareto-dominated equilibria may arise.
Moreover, these problems become more severe as the size of the group grows.

Introduction: 
      
 
        Professor Dillenberger received his PhD from Princeton University and has taught at Penn since 2008. His current research interest is mainly in the area of decision making under risk. In particular, he is interested in models of non-expected utility, dynamic models in which uncertainty (or risk) is resolved gradually over time, and social preferences.
 

Your participation is warmly welcomed!