Advice Taking in Decision Making: Egocentric Discounting and Reputation Formation

Our framework for understanding advice-taking in decision making rests on two theoretical concepts that motivate the studies and serve to explain the findings. The first is egocentric discounting of others' opinions and the second is reputation formation for advisors. Advice discounting is attributed to differential information, namely, the notion that decision makers have privileged access to their internal reasons for holding their own opinion, but not to the advisors' internal reasons. Reputation formation is related to the negativity effect in impression formation and to the trust asymmetry principle. In three studies we measured decision makers' weighting policy for advice and, in a fourth study, their willingness to pay for it. Briefly, we found that advice is discounted relative to one's own opinion, while advisors' reputations are rapidly formed and asymmetrically revised. The asymmetry implies that it may be easier for advisors to lose a good reputation than to gain one. The cognitive and social origins of these phenomena are considered. Copyright 2000 Academic Press.