Informational cascades in the laboratory: Do they occur for the right reasons?

Recently, the theory of informational cascades has been tested in an experiment by L. Anderson and Ch. Holt (American Economic Review, 87 (1997) 847–862) who report that their data support the theory amazingly well. In this paper we report on an experiment designed to find out whether observed cascades are indeed due to rational Bayesian updating. However, we find little support for rational updating. The simple heuristic “follow your own signal” does much better in explaining our data than Bayesian rationality.     

Portfolio choice when relative income matters

This paper derives conditions under which concerns about relative income produce rational herding—the shift of individuals’ portfolios into the same direction as others’. To endure the generality of results, the model makes parsimonious behavioral assumptions and no assumption about the functional form of utility. The two most critical conditions are substitutability between one's own income and relative income and diminishing marginal utility of relative income. The keeping-up-with-the-Joneses (KUJ) motive unambiguously contributes to rational herding. When relative income is viewed as a measure of status, however, the KUJ motive is neither a necessary nor a sufficient condition.     

Rational and behavioural predictors of pre-retirement cash-outs

Given the worldwide concern that individuals are not saving sufficiently for retirement, many governments are taking action to try and rectify this tendency. A key focus area is implementing policies to dissuade individuals from accessing accumulated retirement funds when changing jobs. While traditional economic theories assume that individuals act rationally and make optimal decisions without outside intervention, current policy interventions support behavioural theories of decision-making where sub-optimal choices occur due to limitations in human decision-making. Therefore, interventions are based on the assumption that individuals act irrationally. Despite these interventions, many individuals still access their funds suggesting that current interventions may not be sufficiently aligned with the factors influencing decision making in this environment.The main research objective of this study was to test empirically both rational and behavioural factors that could potentially influence retirement preservation decisions, to determine which factors were the best predictors of whether an individual preserved funds when changing jobs. A research instrument was designed using a combination of existing psychometric measures and customised questions to form an analytical survey. This was used to test the factors that predicted the preservation decisions of a sample of 256 academic and non-academic personnel at a tertiary education institution in South Africa.The study found that behavioural factors play an important role in predicting preservation decisions. In particular, behavioural factors related to bounded rationality, due to the computational complexity of the decision-making environment, emerged as important explanatory variables, indicating that interventions such as decision support and guidance may assist individuals in making optimal decisions.     

Theoretical Implications of Regional Effects

Local economic institutions (systems of property rights and rules of land use) influenced the course of economic change in European history, as well as state formation and religious change. In this paper, I outline the theoretical implications of these regional effects. None of our existing macrolevel theories and explanations of the "rise of the West" can adequately incorporate them, so I present an alternative theory, based on rational choice premises. Yet the existence of these regional effects also highlights the deficiencies of a rational choice theoretical approach. First, the approach is unable to explain historical contexts, institutional legacies, or the effects of timing, which were vital for outcomes of social change but that lie outside the model itself. Second, although it can be very useful, the model of the actor motivated by material self-interest often proved inadequate in historical situations. Solutions are suggested.     

Language and libertarianism: the politics of cyberculture and the culture of cyberpolitics

A significant number of theories concerning the nature of cyberspace or virtuality are being constructed with little regard for the empirical realities of online life. This article sets out certain simple empirical factors related to the nature first of politics in cyberspace and second culture in cyberspace. These questions are posed as ‘what is the politics of cyberculture?’ and ‘what is the culture of cyberpolitics?’. The politics of cyberculture revolves around issues of grossly uneven regional distribution of the Internet and a bias toward anglo‐american language and culture that is based on the competitive individual. The culture of cyberpolitics revolves around informational forms of libertarian and anarchist ideologies that posit cyberspace as the realm of individual freedom. These cultures and politics can be related to each other as the structure and action of cyberspace. The assumption that cyberspace is constituted by individuals is revealed as an assumption of both, and connection between, cyberpolitics and cybercultures.     

Putting social preferences to work: Can revealed preferences predict real effort provision?

This paper presents a model of real effort provision in conjunction with rational social preference theory to predict how individuals exert effort to replace an exogenously determined “state of the world” with a preferred social outcome. Binary dictator games and real effort tasks are used to examine whether individuals exert effort in a manner that is consistent with their revealed preferences. The analysis of controlled laboratory experiments suggest that while individuals’ effort provisions are generally consistent with the theory, those who reveal relatively pro-social preferences fail to procure their “preferred” outcomes too frequently when the state of the world is highly inequitable in their favor. Consideration is given to alternative theories, namely ego depletion and cognitive dissonance, as potential explanations of social outcomes. There is evidence to suggest that dictators, on average, experience ego depletion which leads to a reduction in pro-social behavior through time.     

The Interdependent Family‐Centric Career: Career Perspective of the Overseas Chinese in Indonesia

This theoretical article presents an interdisciplinary approach to extend the scope of current career theories and their application to the overseas Chinese (OC) in Indonesia. Using an ecological model to analyze culture and an emic perspective, the article discusses several factors that affect careers of OC Indonesians. Factors such as culture, discrimination, subjective careers, Confucian values, and family business structure are discussed as variables that create a bounded career perspective. This conceptual view is used as a foundation to discuss the needs for future research and the development of a cross‐cultural career model that is applicable in bounded career environments.     

Crowds and value. Italian Directioners on Twitter

This paper addresses crowd-based dynamics of value creation in participatory culture. Based on a corpus of 114,931 tweets associated with One Direction and similar boy bands, we draw on recent theories of crowd-based organization in digital media as well as classical crowd theory to build a theoretical model of collective value creation. In our model, the achievement of value in the form of trending and individual microcelebrity is based on affectively driven processes of imitation, rather than on rational evaluation and deliberation. We contrast this model with established accounts of microcelebrity and draw out implications for theories of crowd-based organization in digital media and for theories of participatory culture and collaborative value creation in general.     

Military procurement as rational myth: Notes on the social construction of weapons proliferation

This paper outlines four theoretical approaches to the sociology of weapons proliferation: strategic-functional theories, factional theories, geopolitical theories, and institutional theories. Although rarely formulated explicitly, the first three approaches are implicit in the existing literature on proliferation. All three see proliferation as the result of rational decision making, although they differ as to the locus of these decisions, with strategic-functional theories focusing on the nation-state, factional theories on subnational interests, and geopolitical theories on global superpowers. In contrast, the institutional approach disputes the rationality of procurement, arguing instead that weapons purchases are structured and driven by institutionalized normative structures that link advanced weaponry with modernization and sovereignty. The policy implications of this perspective are discussed, and parallels to recent developments in organizational theory are highlighted.     

Informed desire and the ambitions of libertarian paternalism

Sunstein and Thaler’s ‘libertarian paternalism’ (LP) is inspired by the findings of behavioural economics. Its ambitious policy agenda promotes interference which does not block free choice when agents fall short of fully informed and rational choice. Their implicit version of the informed desire view of welfare either provides no, or potentially erroneous, guidance to planners. LP thus faces significant implementation problems. To address these LP might adopt a weaker version of the information requirement on desires or an alternative view of welfare. Nonetheless, informational and bounded rationality considerations suggest that LP should be rethought and its level of ambition reduced.     

Opening the "Black Box' of Software The micro-foundations of informational technologies, practices and environments

The technical and production structures of informational development, the mechanisms that translate information into new products and power, remain opaque. Without defining these micro-foundational patterns, simple questions - what is information, how is it produced, is this production structure significantly unique - remain unanswered, limiting analysis of informational development generally, and evaluation of higher-level "information' theories specifically. Opening the "black box' of software outlines these production practices in one of the central industries of the coming decades, helping explain its social and economic impact and locating its evolution within broader global economic patterns. Software is a unique informational practice that draws on socially structured domain-knowledge as its central resource. This clarifies the importance of information and design in an informational environment, as well as signalling the impact of digital architectures in structuring new patterns of social interaction. These informational patterns are embedded in software both technically and through the development process, resulting in a strong cohesion between production, product and industry structures. The expansion of software process and products throughout society raises the impact of these unique patterns in shaping future economic and social structures in multiple industries, locations and institutions. Detailing the informational patterns in software opens a path to consider an ideal-typology of informational production. Such an ideal type helps define terms and hypotheses that capture both unique differences and general patterns in an informational environment, opening more rigorous analysis of the broader social transformations in the global environment. Failing to recognize these processes limits the space for social debate, policy and action around the establishment and evolution of new digital architectures at the locus of their development.     

Embodied versus Disembodied Information: How Online Artifacts Influence Offline Interpersonal Interactions

This article examines how the sheer volume of personal information recorded and searchable online (online artifacts) has transformed the situated activity system central to Goffman's dramaturgical theories. In‐depth interviews reveal that individuals believe disembodied information based on online artifacts is a more accurate representation of others than embodied information from spatially and temporally bounded face‐to‐face (FTF) processes because they represent how others have behaved over time and are attested by their online contacts. However, the n‐adic structure of online interaction leads to mismatched expectations about whether disembodied information is taken into account during FTF encounters, and consequently can result in embarrassment.     

Spencer is dead, long live Spencer: individualism, holism, and the problem of norms

The debate between the advocates of sociological individualism and those of holism has been pervasive in the development of social theory. This debate is often situated in the false problems of sociology, since it is seen as a particular form of the perennial and irresolvable dilemma between social nominalism and realism, as well as between freedom and determinism. Nevertheless, the debate is far from over within contemporary sociology and other social science, as indicated by the resurgence of individualism in rational action theory and its repudiation by holistic social theories. The aim of this paper is to identify some modern variations on this theme as well as to discern certain common tendencies of two seemingly opposite theoretical perspectives, viz. the convergence upon a normative solution to the problem of social order. This convergence is therefore denoted normative convergence between sociological individualism and holistic sociology.     

Reaching a consensus

This paper explores some aspects of the relation between aggregation and deliberation as ways of achieving a consensus amongst a group of indviduals on some set of issues. I argue firstly that the framing of an aggregation problem itself generates information about the judgements of others that individuals are rationally obliged to take into account. And secondly that the constraints which aggregation theories typically place on consensual or collective judgements need not be consistent with the outcomes of rational deliberative processes driven by individuals’ attempts to update on this information. The paper focuses on the particular case of allocation problems, for which there are established results both in aggregation theory and deliberation theory, to make this claim.     

Scrutinizing impacts of conspiracy theories on readers' political views: a rational choice perspective on anti‐semitic rhetoric in Turkey

Although conspiracy theories have been politically significant throughout history, only a few empirical studies have been about their influence on readers' views. Combining a rational choice approach with a content analysis of an anti‐Semitic best‐selling conspiracy theory book series in Turkey – the Efendi series – and semi‐structured interviews with its readers, this paper reveals the effects of the conspiracy theories on readers' political perspectives. The findings suggest that whereas the rightists are reactive to the Jewish origins of the Dönmes, the leftists oppose the Dönmes as dominant bourgeois figures. This paper concludes that left‐ and right‐wing adherents use the conspiratorial accounts in line with their political views and ontological insecurities. It expands the existing academic literature, which conceptualizes conspiracy theories either as paranoid delusions or as neutral, rational narratives, by showing that they can be both.     

Some reflections upon the macro-micro problem in the sociology of education

The macro-micro problem has been a prominent feature of British sociology of education since the early 1970s. In this discipline macro and micro have each come to be associated with particular theoretical perspectives, notably Marxism and interactionism respectively. This has had several unfortunate consequences. First, arguments about the value of macro and micro work have often been little more than dismissals of one perspective by proponents of another. Second, the macro-micro debate has conflated several quite distinct methodological issues. This article focuses on one of these issues: the question of whether social events can best be explained as the product of large or small scale structures. It is claimed that this issue cannot be resolved by philosophical analysis alone, the answer is a matter for empirical discovery. Moreover, the problem cannot be settled at the moment because we have insufficient well-established theories. Only when more such theories are available will we be able to resolve the question of whether valid macro and micro theories are possible. What stands in the way of achieving this, however, is precisely what led to the fruitless character of the macro-micro dispute in the first place: the organization of the sociology of education around theoretical perspectives rather than around substantive research problems.     

From dual processes to multiple selves: Implications for economic behavior

This article presents a short review of dual-process and dual-system theories from social and cognitive psychology and comments on their relevance for research on economic behavior. We view dual-process theories as a theoretical scaffolding which helps structure and interpret experimental results and can deliver important insights on human behavior in economic contexts. Dual-process ideas and concepts have already started to percolate into economics, contributing to the behavioral turn and the incorporation of bounded rationality into economic theory. The most recent development in this direction is represented by multiple selves models, which we view as a promising first step. We conclude the article with a brief discussion of the remaining articles in the special issue.     

Ethnolinguistic repertoire: Shifting the analytic focus in language and ethnicity1

This paper addresses a contradiction in research on language and ethnicity: how can we discuss distinctively ethnic ways of speaking and still account for the variation and fluidity that characterize them? The theoretical construct introduced in this paper enables researchers to avoid this contradiction. ‘Ethnolinguistic repertoire’ is defined as a fluid set of linguistic resources that members of an ethnic group may use variably as they index their ethnic identities. This construct shifts the analytic focus from ethnic ‘language varieties’ to individuals, ethnic groups, and their distinctive linguistic features. It addresses problems of inter‐group, inter‐speaker, and intra‐speaker variation, as well as debates about who should be considered a speaker of a dialect. This approach, which can also be applied to social groupings beyond ethnicity, is discussed in relation to other approaches and is supported with data on language use in African American, Latino, and Jewish communities in the United States.     

Konformit?t durch Herdenverhalten

The adjustment of one??s own actions to the behavior of others offers an inexpensive alternative to self-reliant reasoning. Thus, from a sociological perspective conformity mirrors informative social influences. First, a basic model of social herding is presented, which describes initial conditions and consequences of informational imitation. Central implications of the model are then tested using process-produced data from the German book market (2001?C2006). While the release of public information as well as announcements by opinion leaders trigger conformity under imperfect information, these stimuli show no effects when the general availability of information is improved. Moreover, the availability of information among readers determines the quality of emerging bestsellers. Altogether, the model of herd behavior proves useful in understanding demand processes in book markets.     

Worum geht es, wenn es um nichts geht?

Rational choice theories appear to have difficulties when it comes to explain behaviour in so called ‘low cost, low benefit’ situations. As a consequence, low cost situations are sometimes regarded as a serious problem of the rational choice paradigm as a whole. We demonstrate that, quite to the contrary, theories of rational action are perfectly well suited to understand the logic of low cost situations. The costs of information and decision making on the part of the actor and the clarity of incentive or cost structures on the part of the situation prove to be the central variables. Since there is a close link between low cost situations and certain collective good problems, the role of these variables is discussed with regard to the production of collective goods. In adapting an established model of routine based decision making, we show how the threshold of a low cost situation can be determined analytically.