Vortrag
The Effect of Peer Observation on Consumption Choices: Experimental Evidence

Antonia Grohmann, Sahra Sakha


30th Annual Congress of the European Economic Association : EEA 2015
Mannheim, 24.08.2015 - 27.08.2015



Abstract:
This paper uses a clean experiment to investigate the impact of peer observation on the consumption decisions of rural households in Thailand. We find that those groups that observe each other show lower within group standard deviation in their decisions. At the same time, we also find that individual choice is influenced by group choice. We find that unfamiliarity with product is counteracted by peer effects. We further find that individuals with higher cognitive ability are less affected by peer effects.

Abstract

This paper uses a clean experiment to investigate the impact of peer observation on the consumption decisions of rural households in Thailand. We find that those groups that observe each other show lower within group standard deviation in their decisions. At the same time, we also find that individual choice is influenced by group choice. We find that unfamiliarity with product is counteracted by peer effects. We further find that individuals with higher cognitive ability are less affected by peer effects.

Antonia Grohmann

Wissenschaftlerin

Themen: Verbraucher



JEL-Classification: D12;C21;D85
Keywords: Consumption, Peer Effects, Conformity
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