Informational cascades can occur when rationally acting individuals decide independently of their private information and follow the decisions of preceding decision-makers. In the process of updating beliefs, differences in the weighting of private and publicly available social information may modulate the probability that a cascade starts in a decisive way. By using functional magnetic resonance imaging, we examined neural activity while participants updated their beliefs based on the decisions of two fictitious stock market traders and their own private information, which led to a final decision of buying one of two stocks. Computational modeling of the behavioral data showed that a majority of participants overweighted private information. Overweighting was negatively correlated with the probability of starting an informational cascade in trials especially prone to conformity. Belief updating by private information was related to activity in the inferior frontal gyrus/anterior insula, the dorsolateral prefrontal cortex and the parietal cortex; the more a participant overweighted private information, the higher the activity in the inferior frontal gyrus/anterior insula and the lower in the parietal-temporal cortex. This study explores the neural correlates of overweighting of private information, which underlies the tendency to start an informational cascade.
People often make decisions in a social environment. The present work examines social influence on people’s decisions in a sequential decision-making situation. In the first experimental study, we implemented an information cascade paradigm, illustrating that people infer information from decisions of others and use this information to make their own decisions. We followed a cognitive modeling approach to elicit the weight people give to social as compared to private individual information. The proposed social influence model shows that participants overweight their own private information relative to social information, contrary to the normative Bayesian account. In our second study, we embedded the abstract decision problem of Study 1 in a medical decision-making problem. We examined whether in a medical situation people also take others’ authority into account in addition to the information that their decisions convey. The social influence model illustrates that people weight social information differentially according to the authority of other decision makers. The influence of authority was strongest when an authority's decision contrasted with private information. Both studies illustrate how the social environment provides sources of information that people integrate differently for their decisions.
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