Alexander Tabarrok wrote:
>Consider the following model.  If you are ignorant it's reasonable to adopt
>what you perceive as the consensus view but unreasonable to hold that view
>firmly ... If you investigate the issue (you receive a series of signals)
>it may turn out that the consensus view appears to be correct or it may turn
>our that it appears to be incorrect in which case you are buffeted by
>the signals towards an extreme.  As you are pushed towards the extreme
>your views become firmer since they are the result of cumulative
>signals.  It thus happens that everyone at the extreme is firm since they have
>received many signals pushing them to that extreme.  Thus, a positive
>correlation between extremeness and firmness.

A problem with this model is that if all these people are getting signals
about the same thing, their signals should be correlated.  The people who
become more confident and move from the initial consensus position should
also tend to move in the same direction from that consensus.  But we observe
similar levels of confidence moving both directions away from the consensus.

Another problem is that people have to be unaware of other people's positions,
otherwise they could update on that and then should all end up at the same

Asst. Prof. Economics, George Mason University
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703-993-2326  FAX: 703-993-2323

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