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DIW Applied Micro Seminar - May 17, 2011

Preferences for Consistency

Event details
What
  • Seminar
When May 17, 2011
from 13:15 to 14:45
Where DIW Berlin, Mohrenstr. 58, Eleanor-Dulles-Room (5.2.010)
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Abstract: This paper studies how a "preference for consistency" can affect economic decision-making. We propose a two-period model of decision-making where people have a preference for consistency because consistent behavior allows them to signal personal and intellectual strength. This creates a trade-off between choosing according to their beliefs and reputational concerns. We then present three experiments that study main predictions and implications of the model. Results from the experiments suggest that preferences for consistency affect behavior in a systematic way and can provide a powerful channel of social influence.

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