The Wharton School

Abstract Four studies examined dyadic collaboration on quantitative estimation tasks. In accord with the tenets of “naïve realism,” dyad members failed to give due weight to a partner's estimates, especially those greatly divergent from their own. The requirement to reach joint estimates through discussion increased accuracy more than reaching agreement through a mere exchange of numerical “bids.” However, even the latter procedure increased accuracy, relative to that of individual estimates (Study 1).

Two studies provided evidence for the role of naïve realism in the failure of individuals to give adequate weight to peer input, and explored two strategies for reducing the impact of this inferential bias. Study 1 demonstrated that dyad members see their own estimates as more “objective” than those of their partners and that this difference in perceived objectivity predicts the degree of underweighting.

Abstract: Prior literatures on negotiations and auction behavior have both addressed the relationship between initial asking prices and the final sale price of a commodity. However, the recommendations of these two literatures come into direct conflict in the context of a home sale, which possesses features of both an auction and a negotiation.

Abstract Two studies document do-gooder derogation (the putting down of morally motivated others), by studying the reactions of meat eaters to vegetarians. In Study 1, 47% of participants freely associated negative terms with vegetarians and the valence of the words was negatively related to how much participants expected vegetarians to see themselves as morally superior to nonvegetarians.

When predicting potential jury verdicts, trial attorneys often seek second opinions from other attorneys. But how much weight do they give to these opinions, and how optimally do they use them? In a four-round estimation task developed by Liberman et al.(under review), pairs of law students and pairs of experienced trial attorneys estimated actual jury verdicts. When participants were given access to a partner's estimates, participants' accuracy improved in both groups.

Two studies investigated the effect of expressed interest on individuals' openness to opposing viewpoints and perceptions of debate counterparts. Participants in Study 1 engaged in an online conversation with a purported debate counterpart who did or did not express interest in the participants' viewpoint by asking an elaboration question—that is, a question geared at soliciting additional information.

Abstract Prior investigators have asserted that certain group characteristics cause group members to disregard outside information and that this behavior leads to diminished performance. We demonstrate that the very process of making a judgment collaboratively rather than individually also contributes to such myopic underweighting of external viewpoints. Dyad members exposed to numerical judgments made by peers gave significantly less weight to those judgments than did individuals working alone.

Social status concerns influence investors' decisions by driving a wedge in attitudes toward aggregate and idiosyncratic risks. I model such concerns by emphasizing the desire to “get ahead of the Joneses,” which implies that aversion to idiosyncratic risk is lower than aversion to aggregate risk. The model predicts that investors hold concentrated portfolios in equilibrium, which helps rationalize the small premium for undiversified entrepreneurial risk. In the model, status concerns are more important for wealthier households. Consequently, these households own a disproportionate share of risky assets, particularly private equity, and experience greater volatility of consumption, consistent with empirical evidence.