Following the Herd

Following the Herd

Econs—the authors’ imagined, consistently rational decision-makers—are pretty unsociable creatures (as are some economists we know). They communicate with others only if they can gain something from the encounter, they care about their reputations (because a good reputation is valuable), and they will learn from others if actual information can be obtained, but Econs are not followers of fashion. Their hemlines do not go up and down except for practical reasons, they do not wear ties, and if they did they would not grow narrower and wider simply as a matter of style. (By the way, ties were originally used as napkins; they actually had a function.) Humans, on the other hand, are often influenced by other Humans, even when they shouldn’t be.

Sometimes massive social changes, in markets and politics alike, start with a small and even serendipitous social nudge. A prominent person might state an opinion or engage in an action, which gives a kind of signal, a green light or a permission slip, to others, who do the same. Or the opinion or action might come from someone who is not so prominent, but who is committed and who manages to come to the public’s attention, and who ends up turning a business or even a culture around. The issue might involve a product, a book, an idea, a political candidate, or a cause. And occasionally, a trickle becomes a flood, especially when social media is involved.

Understanding social influence matters to choice architects for two reasons. First, most people learn from others. This is usually good, of course. Learning from others is how individuals and societies develop. But many of our biggest misconceptions also come from others. The problem is that what we learn from such interactions may not actually be true. When social influences have caused people to have false or biased beliefs, then some nudging may help. A second reason this topic is important for our purposes is that one of the most effective ways to nudge (for good or evil) is via social influence.

In 2020, in the places where we were living during the spring and summer (Northern California and Boston), most people chose to wear masks in public places in response to the COVID-19 pandemic—but in other places in the United States, many people (including prominent political leaders) made a point of not wearing masks. Social influences both promoted and discouraged mask wearing. A point worth remembering: Telling people that a new norm is emerging—say, in the domain of sustainability—can create a self-fulfilling prophecy. Many do not want to be on the wrong side of history, and if they learn that people are increasingly doing something, they might think that what seemed difficult or even impossible is achievable, maybe even inevitable.

Social influences come in two basic categories. The first involves information. If many people do something or think something, their actions and thoughts can seem to provide information about what is best for you to do or think, though popularity alone does not establish that. If people are picking up after their dogs, buckling their seatbelts, driving under the speed limit, saving for retirement, treating people equally, or wearing masks, you might think that is the right thing to do. The second involves peer pressure. If you care about what other people think about you (perhaps overestimating how much attention they pay to what you are doing), then you might go along with the crowd to avoid their wrath or curry their favor. In some places during the COVID-19 pandemic, you’d get a cold stare or worse, if you weren’t wearing a mask in a public place—and in some places, you’d get a cold stare or worse if you were wearing a mask.

For a quick preview of the power of social nudges, consider just a few research findings:

1. Teenage girls who see that other teenagers are having children are more likely to become pregnant themselves.
2. Employees are far more likely to file suit against their employers if members of the same work group have also done so.
3. Broadcasters mimic one another, producing otherwise inexplicable fads in programming. (Think reality television, game shows, singing and dancing contests that come and go, the rise and fall and rise of science fiction, and so forth.)
4. The academic effort of college students is influenced by their peers, so much so that the random assignments of first-year students to dormitories or roommates can have big consequences for their grades and hence on their future prospects. (Maybe parents should worry less about which college their kids go to and more about which roommate they get.)
5. In the American judicial system, federal judges on three-judge panels are affected by the votes of their colleagues. The typical Republican appointee shows pretty liberal voting patterns when sitting with two Democratic appointees, and the typical Democratic appointee shows pretty conservative voting patterns when sitting with two Republican appointees. Both sets of appointees show far more moderate voting patterns when they are sitting with at least one judge appointed by a president of the opposing political party.

Conformity is one reason other people’s choices can influence our own.