Conformity and Influence

Abstract

I model the behavior of decision-makers seeking conformity and influence in a connected population. The model allows for one-sided linking, with information flowing from the target to the link’s originator. Conformity is achieved only with a social order, necessitating differentiated rewards despite ex ante homogeneity. The leader holds a strategic social location ex post, exerting influence independent of any leadership traits. A strong desire to influence produces non-conforming autonomous decision-makers. Socially detrimental multiple leaders can be sustained as well.

Conformity by information or relation? An exploration of investors' response in equity crowdfunding

“…, 1992). Information from a large population or particular role continually facilitates subsequent decisions, and an increasing number of individuals conform (Goldbaum, 2019). Informational influenced conformity is also universal in online activities.…”

“…Such information-oriented conformity is known as information cascades, referring to sequential actions to imitate previous behaviors (Bikhchandani et al, 1992). Information from a large population or particular role continually facilitates subsequent decisions, and an increasing number of individuals conform (Goldbaum, 2019). Informational influenced conformity is also universal in online activities.…”

“…First, different from lead investors who are formal centers and supervised by the platform, informal centers are more likely to bring about speculations through their structural advantages causing low-cost information flow and resource allocation from the lack of official authentication by the platform, increasing the difficulty of obtaining the majority's trust and thus leading to their lower influence on the conformity. Second, in an equity crowdfunding with a lead investor, the highly centralized structure of follow-investors means multiple leaders, whether in a formal or an informal center, resulting in the majority's hesitation caused by their trade-offs with different leaders and, in turn, reduced conformity Valid N (listwise) N 5 108 N 5 108 N 5 73 Note(s): (1) "-": With eliminating the residual influence, the heteroskedasticity test is not necessary for robust regression, so the result of the D-W value and White test is blank (2)*: p-value < 0.1; **: p-value < 0.05; ***: p-value < 0.01 behavior (Goldbaum, 2019). Thus, a highly centralized structure is not conducive to informational influence on follow-investors' conformity in equity crowdfunding with a lead investor.…”