Advice Taking in Decision Making: Egocentric Discounting and Reputation Formation

Ilan Yaniv, Eli Kleinberger

Research output: Contribution to journalArticlepeer-review

435 Scopus citations

Abstract

Our framework for understanding advice-taking in decision making rests on two theoretical concepts that motivate the studies and serve to explain the findings. The first is egocentric discounting of others' opinions and the second is reputation formation for advisors. Advice discounting is attributed to differential information, namely, the notion that decision makers have privileged access to their internal reasons for holding their own opinion, but not to the advisors' internal reasons. Reputation formation is related to the negativity effect in impression formation and to the trust asymmetry principle. In three studies we measured decision makers' weighting policy for advice and, in a fourth study, their willingness to pay for it. Briefly, we found that advice is discounted relative to one's own opinion, while advisors' reputations are rapidly formed and asymmetrically revised. The asymmetry implies that it may be easier for advisors to lose a good reputation than to gain one. The cognitive and social origins of these phenomena are considered.

Original languageAmerican English
Pages (from-to)260-281
Number of pages22
JournalOrganizational Behavior and Human Decision Processes
Volume83
Issue number2
DOIs
StatePublished - Nov 2000

Bibliographical note

Funding Information:
This research was supported by grants from the Israel Foundations Trustees and the Israel Science Foundation to Ilan Yaniv. The support of the Rotman Center at the Hebrew University is also acknowledged. Portions of the research are included in a Master's thesis submitted by Eli Kleinberger to the Department of Psychology. Address correspondence and reprint requests to Ilan Yaniv, Department of Psychology, Hebrew University, Jerusalem, Israel 91905. E-mail: ilan.yaniv@mscc.huji.ac.il. 260

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